DEPARTMENT: MINERAL RESOURCES...South Africa amounted to R167 237 million by September 2012, of...
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Transcript of DEPARTMENT: MINERAL RESOURCES...South Africa amounted to R167 237 million by September 2012, of...
DEPARTMENT: MINERAL RESOURCES
REPUBLIC OF SOUTH AFRICA
Directorate: Mineral Economics
SOUTH AFRICA’S MINERAL INDUSTRY
2013/2014
The cover picture represents South Africa‟s Minerals Mining Industry.
Issued free by and obtainable from the
Director: Mineral Economics, Trevenna Campus,
70 Meintjies Street, Pretoria 0002, Private Bag X59, Arcadia 0007
Telephone +27 (0) 12 444 3531, Telefax +27 (0) 12 341 4134
www.dmr.gov.za
Editors:
S Mohale, TR Masetlana; M Bonga; M Ikaneng; N Dlambulo; L Malebo; P Mwape
Statistics: M Köhler
Co-ordinator: A Venter
First Published August 1984
This, the 31st edition, published March 2015
Whereas the greatest care has been taken in the compilation of the contents
of this publication, the Mineral Economics Directorate does not hold itself
responsible for any errors or omissions.
Copyright Reserved
ISBN: 978-0-621-43629-7
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FOREWORD
South Africa ranks among the most sophisticated and promising emerging markets in the world. The introduction and adoption of the National Development Plan (NDP) 2030 in September 2012 by the South African government, envisaged an economy that serves the needs of all South Africans. It offers a long-term socio-economic development road map. In 2013, Government‟s National Development Plan (NDP) and the New Growth Path (NGP) were applauded for their focus on creating jobs. South Africa‟s mining industry continues to play an economical and socioeconomic role in the country‟s development. The country accounts for 96 percent of known global reserves of the platinum group metals (PGMs), 74 percent of chrome, 26 percent manganese, 25 percent of vanadium and 11 percent of gold reserves. As a leading producer and supplier of a range of minerals, the country offers a highly competitive investment location ensuring that it can meet specific trade and investment requirements of prospective investors and business people, whilst also meeting the development needs of its populace. Although global activity strengthened during the second half of 2013 and Q3 2013 touted as turning point for the global economy, the reality is that 2013 was a difficult year. However, South Africa continued to attract investment interest. The country has the potential to supply a large share of the global demand for many commodities, but its rich endowment of natural resources and high mineral potential can only be developed and extended through a vibrant exploration sector. In 2013, a total amount of 3 933 applications for prospecting and mining rights were received by the DMR. Of the total number of applications received, 3 003 applications were for prospecting rights, 930 were for mining rights. This gives an indication of interest from the investment community for South Africa‟s natural resources. In the same year, mining contributed R279.7 billion ($29.0 billion) or 9.2 percent to gross domestic product, an increase of R9.6 billion over the previous year. Despite the slowdown in the global economy, depressed commodity prices as well as labour unrest, South Africa‟s mineral export sales revenue increased by 4 percent to R278.7 billion in 2013 from R269.1 in 2012. However, primary minerals export sales percentage contribution to the country‟s total exports value of goods decreased from 33 to 30 percent. During this period, PGMs and ferrous mineral export sales revenue increased by 23.7 percent and 23.3 percent, respectively. Non-ferrous minerals followed the same trend with an increase of 12 percent to R14.7 billion in 2013. The increase is attributed to strong commodities demand from China, particularly of iron ore, increased export volumes and well as the depreciation of the rand / dollar exchange rate. However, the negative effect of the weaker commodity prices was evident in the gold and coal export sales revenue which decreased by 25.1 percent and 2.6 percent from R72 billion in 2012 to R53.9 billion in 2013 and from R52.2 billion to R50.9, respectively. The processed total sales revenue as well increased by 12.2 percent from R59.5 billion in 2012 to R66.7 billion in 2013, with export and local sales increasing by 12.6 percent and 10.1 percent, respectively. The largest contributors to the total of selected processed minerals sales were chromium alloys at 42.8 percent, followed by a conglomerate of classified commodities at 39.1 percent and antimony at 22.4, respectively. However, the total state revenue from the mining sector decreased significantly by 47.6 percent to R18.9 billion in 2013 from R12.8 billion in 2012. Iron ore was the largest contributor at 33.3 percent to the total state revenue, followed by platinum and chrome at 17.9 and 16.6 percent, respectively. In addition, SA‟s total mining employment decreased by 14 533 workers or 2 percent to 510 099 in 2013 from 524 632 in 2012, mainly due to the retrenchments in the gold and PGMs sectors as a result of industrial action. While, during the same period remuneration in the mining sector increased by 7.7 percent from R 93.61 billion in 2012 to R 100.81 billion in 2013 (Table 5). For the past decade, 2004-2013, a total of 61 190 direct jobs were created, highlighting the significance of mining to the South African economy.
As a result of its vast mineral resources, South Africa is, to a large degree self-sufficient with respect to the supply of minerals however, there are some minerals and mineral products, which need to be imported due to lack of local resources. The total value of the more significant imports during 2012, decreased by 16.1 percent from R20.1 billion in 2011 to R16.8 billion in 2012. In order to reduce the increase in imports, South Africa will need to intensify beneficiation and develop projects that will produce value added products locally and substitute imported goods. Thus, beneficiation remains a key initiative for government, as it seeks to leverage the country‟s comparative advantage in mineral resource endowment to create a competitive advantage for domestic mineral beneficiating entities thus playing a contributory role towards setting the country‟s growth trajectory on a production led growth path. Despite the slow economic recovery globally, newly committed investment in mineral related projects in South Africa amounted to R167 237 million by September 2012, of which 87.9 percent is for primary
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minerals and 12.1 percent recorded for processed mineral products. Platinum projects dominated the primary minerals, accounting for 54.8 percent followed by other minerals 38.9 percent and gold‟s 5.4 percent. This paints a picture that despite a myriad of challenges that the sector faces the country remains among the favoured investment destinations. Mineral Economics team wish to thank the staff of the Mineral Policy and Promotion for their continued sterling performance in contributing to the compilation of this publication, the industry for its support and cooperation. Special appreciation is extended to Mr. S Ntshobane, Ms K Ratshomo, Mr. O Mkhari and Mr. L Maphango, all of whom are no longer in the employ of the department but selflessly contributed to the compilation of this 31
st edition of SAMI.
TR Masetlana
Director: Mineral Economics
31st March 2015
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CONTENTS
Page
FOREWORD i
LIST OF FIGURES vi
LIST OF TABLES ix
ABBREVIATIONS AND SYMBOLS xiv
EXPLANATORY NOTES xv
PART ONE: SOUTH AFRICA’S MINERAL INDUSTRY
GENERAL REVIEW P MWAPE, M MNGUNI. N JALI, K MENOE 1
INTRODUCTION 1
STRUCTURE OF THE MINING INDUSTRY 1
MINERAL INDUSTRY STRENGTH 14
INFRASTRUCTURE DEVELOPMENTS 16
PRODUCTION OVERVIEW OF SELECTED MINERALS 19
MINERAL EXPLORATION 20
ROLE OF MINING IN THE NATIONAL ECONOMY 21
MINERAL PRODUCTION AND SALES IN 2013 27
SELECTED PROCESSED MINERAL SALES 29
SOUTH AFRICA‟S IMPORTS OF SELECTED PRIMARY AND PROCESSED MINERAL PRODUCTS,
2013 31
REPORTED MINERAL-RELATED PROJECTS IN SOUTH AFRICA 32
SADC MINING AND MINERAL PRODUCTION OF SELECTED MAJOR MINERALS 33
MINERAL BENEFICIATION 34
ECONOMIC OUTLOOK FOR THE SOUTH AFRICAN MINERALS INDUSTRY 2012/2013 35
PART TWO: REVIEW OF SELECTED COMMODITIES
PRECIOUS METALS AND MINERALS
OVERVIEW L MALEBO 41
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DIAMONDS O MOUMAKWA 44
GOLD P PEROLD 49
PLATINUM-GROUP METALS (PGMS) O MOUMAKWA 56
SILVER P PEROLD 63
ENERGY MINERALS
OVERVIEW K REVOMBO 67
COAL K REVOMBO 71
HYDROCARBON FUELS L RAMANE 86
URANIUM M BONGA 95
NON-FERROUS METALS AND MINERALS
OVERVIEW M IKANENG & L RAMANE 102
ALUMINIUM M IKANENG 106
ANTIMONY L MAPHANGO 113
COBALT L RAMANE 119
COPPER S MNYAMENI 125
LEAD S MNYAMENI 131
NICKEL L RAMANE & M IKANENG 138
TITANIUM M IKANENG 146
ZINC S MNYAMENI 153
ZIRCON M IKANENG 159
FERROUS METALS AND MINERALS
OVERVIEW L MALEBO 163
CHROMIUM S NTSHOBANE 166
IRON ORE S NTSHOBANE 172
MANGANESE S NTSHOBANE 177
SILICON L MALEBO & M NYABANYABA 183
VANADIUM L MALEBO & M NYABANYABA 186
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INDUSTRIAL MINERALS
OVERVIEW N DLAMBULO & R MOTSIE 190
AGGREGATE AND SAND R MOTSIE 199
ALUMINO-SILICATES M MODISELLE 203
DIMENSION STONE O MKHARI & R MOTSIE 209
FLUORSPAR M MODISELLE 213
LIMESTONE AND DOLOMITE R MOTSIE 218
PHOSPHATE ROCK M MURAVHA 225
SPECIAL CLAYS M MURAVHA 231
SULPHUR M MODISELLE 239
VERMICULITE M MURAVHA 245
STATISTICS FOR OTHER INDUSTRIAL MINERALS R MOTSIE 250
PART THREE: GENERAL INFORMATION
USEFUL ADDRESSES 260
DEPARTMENT OF MINERAL RESOURCES HEAD OFFICE 260
MINERAL REGULATION REGIONAL DIRECTORATES 260
ASSOCIATED GOVERNMENT DEPARTMENTS 263
STATE OWNED ENTERPRIZES 264
OTHER MINERAL RELATED ORGANISATIONS 267
LIST OF OTHER PUBLICATIONS 270
SUBSCRIPTION FORM FOR SOME OF THE PUBLICATIONS 275
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LIST OF FIGURES
Page
FIGURE 1: SUMMARY OF SOUTH AFRICA‟S ADMINISTRATION OF MINERAL LAWS 11
FIGURE 2 EXPLORATION EXPENDITURE BY REGION, 2013 20
FIGURE 3: PERCENTAGE CONTRIBUTION OF MINING AND QUARRYING TO GROSS
DOMESTIC PRODUCT AND TOTAL FIXED CAPITAL FORMATION OF SOUTH
AFRICA, 2004 – 2013 (CURRENT RAND PRICES) 22
FIGURE 4: CONTRIBUTION OF PRIMARY MINERALS TO SOUTH AFRICA‟S EXPORTS#,
2004-2013 23
FIGURE 5: MINING INDUSTRY‟S EMPLOYMENT BY SECTOR, 2013 26
FIGURE 6: MINING INDUSTRY‟S REMUNERATION BY SECTOR, 2013 26
FIGURE 7: CONTRIBUTION OF PRIMARY MINERAL COMMODITIES TO TOTAL SALES
REVENUE, 2013 27
FIGURE 8: THE IDEX ONLINE MONTHLY AVERAGE POLISHED DIAMOND PRICE
INDEX, 2013 46
FIGURE 9: GLOBAL GOLD SUPPLY, 2013 49
FIGURE 10: SOUTH AFRICA‟S CONTRIBUTION TO GLOBAL PRODUCTION, 2013 50
FIGURE 11: SOUTH AFRICA‟S PRIMARY GOLD PRODUCTION AND CONTRIBUTION
TO TOTAL PRODUCTION BY PROVINCE, 2013 50
FIGURE 12: SOUTH AFRICA‟S PRIMARY GOLD PRODUCTION AND CONTRIBUTION TO TOTAL
PRODUCTION BY GOLD FIELD, 2013 51
FIGURE 13: WORLD GOLD DEMAND MARKETS, 2013 52
FIGURE 14: AVERAGE GOLD PRICE MOVEMENTS IN RANDS AND DOLLARS, 2013 53
FIGURE 15: GLOBAL PGMs SUPPLY, 2013 56
FIGURE 16: SA PGMs PRODUCTION, 2013 57
FIGURE 17: GLOBAL PGMs GROSS DEMAND AND RECYCLING, 2013 58
FIGURE 18: PGMs MONTHLY AVERAGE PRICES, 2013 59
FIGURE 19: GLOBAL SILVER PRODUCTION BY SOURCE, 2013 63
FIGURE 20: S.A SILVER PRODUCTION BY SOURCE-2012, 2013 64
FIGURE 21: WORLD SILVER CONSUMPTION (Moz) BY SECTOR, 2013 65
FIGURE 22: MONTHLY AVERAGE SILVER PRICES, 2013 66
FIGURE 23: LOCAL COAL CONSUMPTION BY SECTOR (PERCENTAGE), 2013 74
FIGURE 24: MAJOR COAL EXPORTERS (Mt), 2013 75
FIGURE 25: SOUTH AFRICA‟S EXPORT VOLUMES BY REGIONAL DESTINATION, 2013 76
FIGURE 26: TOP 10 IMPORTERS (Mt) OF SOUTH AFRICA‟S COAL, 2013 77
FIGURE 27: RBCT MONTHLY COAL PRICES, JANUARY 2012 – JUNE 2014 78
FIGURE 28: MONTHLY AVERAGE BRENT CRUDE OIL PRICES, JANUARY 2011 – MAY 201489
FIGURE 29: MONTHLY AVERAGE NATURAL GAS PRICES, JAN 2011 – JUNE 2014 90
FIGURE 30: AVERAGE MONTHLY SPOT URANIUM PRICES, 2011-2013 98
FIGURE 31: WORLD REFINED ALUMINIUM PRODUCTION BY REGION, 2013 107
FIGURE 32: WORLD ALUMINIUM SUPPLY AND DEMAND 2006-2013 107
FIGURE 33: INDUSTRIAL DEMAND FOR HIGH GRADE PRIMARY ALUMINIUM, 2013 108
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FIGURE 34: LONDON METAL EXCHANGE CASH SETTLEMENT PRICE (MONTHLY
AVERAGES), 2012 TO 2014 109
FIGURE 35: GLOBAL ANTIMONY CONSUMPTION BY SECTOR, 2013 114
FIGURE 36: ANTIMONY METAL BULLETIN, FREE MARKET PRICES, 2013 – 201 115
FIGURE 37: COBALT CONSUMPTION BY END USE, 2013 121
FIGURE 38: COBALT PRICE, 2011 – 2014 122
FIGURE 39: GLOBAL REFINED COPPER PRODUCTION AND CONSUMPTION, 2008 – 2013 127
FIGURE 40: LME CASH SETLEMENT COPPER PRICES (MONTHLY AVERAGE), 2012-2014 128
FIGURE 41: REFINED LEAD PRODUCTION IN 2013 133
FIGURE 42: REGIONAL LEAD METAL CONSUMPTION IN 2013 133
FIGURE 43: LEAD CASH SETTLEMENT PRICES (MONTHLY AVERAGE) IN 2013 134
FIGURE 44: THE PRIMARY END-USES FOR NICKEL 2013 140
FIGURE 45: MONTHLY AVERAGE NICKEL PRICES, 2012- 2014 141
FIGURE 46: GLOBAL CONSUMPTION OF TITANIUM DIOXIDE PIGMENT BY SECTOR
IN 2013 148
FIGURE 47: METAL BULLETIN PRICES FOR RUTILE AND ILMENITE, 2013 – 2014 149
FIGURE 48: REGIONAL PRODUCTION OF REFINED ZINC, 2013 155
FIGURE 49: REGIONAL CONSUMPTION OF REFINED ZINC, 2013 155
FIGURE 50: LME ZINC CASH SETTLEMENT PRICES (MONTHLY AVERAGES), 2013 156
FIGURE 51: GLOBAL CONSUMPTION OF ZIRCON BY SECTOR IN 2013 160
FIGURE 52: PRICES FOR FOUNDRY GRADE ZIRCON, FREE ON BOARD AUSTRALIA,
2013 – 2014 161
FIGURE 53: WORLD‟S LEADING STAINLESS STEEL PRODUCERS, 2013 168
FIGURE 54: CHROME ORE AND FERROCHROME PRICES, 2013 170
FIGURE 55: REGIONAL CRUDE STEEL CONSUMPTION, 2013 174
FIGURE 56: IRON ORE SPOT PRICES, 2012 AND 2013
174
FIGURE 57: QUARTERLY MANGANESE ORE PRICES, 2008 – 2013 180
FIGURE 58: MONTHLY AVERAGE PRICES OF MANGANESE ALLOYS, 2008 – 2013 180
FIGURE 59: CONTRIBUTION TO SILICON PRODUCTION BY COUNTRY, 2013
183
FIGURE 60: SILICON METAL AND FERROSILICON PRICES, 2009-2013 185
FIGURE 61: WORLD VANADIUM RESERVES, 2013 186
FIGURE 62: WORLD VANADIUM PRODUCTION, 2013 186
FIGURE 63: MONTHLY FERROVANADIUM AND VANADIUM PENTOXIDE PRICES,
2010 - 2013 188
FIGURE 64: INDUSTRIAL MINERAL SALES, 2009 – 2013 190
FIGURE 65: LOCAL SALES VALUE OF INDUSTRIAL MINERALS, 2013 191
FIGURE 66: EXPORT SALES OF INDUSTRIAL MINERALS, 2013 192
FIGURE 67: IMPORTS OF PRIMARY AND MANUFACTURED INDUSTRIAL MINERALS,
2009 – 2013 192
FIGURE 68: EMPLOYMENT IN THE INDUSTRIAL MINERALS SECTOR, 2009 – 2013 193
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FIGURE 69: WORLD PRODUCTION OF ALUMINO-SILICATES BY COUNTRY, 2013 203
FIGURE 70: WORLD REFRACTORIES MARKET BY END-USERS, 2013 204
FIGURE 71: WORLD ALUMINO-SILICATES PRICES, 2007–2013 206
FIGURE 72: WORLD CONSUMPTION OF DIMENSTION STONE BY SECTOR 210
FIGURE 73: WORLD DEMAND OF DIMENSION STONE BY COUNTRY, 2013 210
FIGURE 74: WORLD FLUORSPAR PRODUCTION, 2013 213
FIGURE 75: DEMAND FOR LIMESTONE BY SECTOR, 2013 219
FIGURE 76: SOUTH AFRICA'S IMPORTS OF CEMENT PRODUCTS, 2011 – 2013 220
FIGURE 77: PHOSPHATE ROCK PRODUCTION BY COUNTRY, 2013 225
FIGURE 78: WORLD PHOSPHATE ROCK DEMAND, 2013 227
FIGURE 79: PRICES OF PHOSPHATE RESOURCES, 2006 –2013 228
FIGURE 80: WORLD PRODUCTION OF SPECIAL CLAYS, 2013 232
FIGURE 81: WORLD PRODUCTION OF SULPHUR BY COUNTRY, 2013 239
FIGURE 82: WORLD PRODUCTION OF VERMICULITE BY COUNTRY, 2013 245
FIGURE 83: VERMICULITE CONSUMPTION BY SECTOR, 2013 247
FIGURE 84: VERMICULITE PRICES, 2006-2013 248
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LIST OF TABLES
Page
TABLE 1: SOUTH AFRICA‟S ROLE IN WORLD MINERAL RESERVES, PRODUCTION
AND EXPORTS, 2013 15
TABLE 2: SOUTH ARICA‟S PRODUCTION OF SELECTED MAJOR MINERALS, 2009 – 2013 19
TABLE 3: CONTRIBUTION OF MINING AND QUARRYING TO GROSS DOMESTIC PRODUCT,
FIXED CAPITAL FORMATION AND TOTAL NATIONAL EXPORTS OF GOODS, 2004 –
2013 (at current prices) 22
TABLE 4: CONTRIBUTIONS OF MINING AND QUARRYING TO STATE REVENUE, 2004–2013 24
TABLE 5: EMPLOYMENT AND WAGES IN SOUTH AFRICA‟S MINING INDUSTRY, 2004–2013 25
TABLE 6: EMPLOYMENT AND REMUNERATION BY PROVINCE, 2013 25
TABLE 7: MINERAL PRODUCTION AND SALES, 2013 28
TABLE 8: SOUTH AFRICA‟S PRIMARY MINERAL SALES BY PROVINCE, 2013 29
TABLE 9: SOUTH AFRICA‟S PRODUCTION, LOCAL AND EXPORT SALES OF SELECTED
PROCESSED MINERAL PRODUCTS, 2013 30
TABLE 10: SOUTH AFRICA‟S LOCAL AND EXPORT SALES OF SELECTED PROCESSED
MINERAL PRODUCTS BY PROVINCE, 2013 31
TABLE 11: SOUTH AFRICA‟S IMPORTS OF SELECTED PRIMARY AND PROCESSED MINERAL
PRODUCTS, 2013 32
TABLE 12: NEWLY COMMITTED MINERAL-RELATED PROJECTS IN SOUTH AFRICA, 2013 33
TABLE 13: SADC MINE PRODUCTION OF SELECTED MAJOR MINERALS, 2009 – 2013 33
TABLE 14: OVERVIEW OF THE WORLD ECONOMIC OUTLOOK PROJECTIONS 36
TABLE 15: MINERAL/METAL PRICES 39
TABLE 16: SOUTH AFRICA'S PRODUCTION AND SALES OF PRECIOUS METALS, 2013 42
TABLE 17: EMPLOYMENT AND REMUNERATION IN SOUTH AFRICA'S PRECIOUS METALS
AND MINERALS MINES, 2009 – 2013 42
TABLE 18: WORLD ROUGH DIAMOND PRODUCTION, 2013 44
TABLE 19: SOUTH AFRICA‟S ROUGH DIAMOND PRODUCTION AND SALES, 2013 45
TABLE 20: EMPLOYMENT (INCLUDING CONTRACTORS) AND REMUNERATION IN SOUTH
AFRICA'S DIAMOND MINING INDUSTRY, 2009-2013 48
TABLE 21: SOUTH AFRICA‟S PRODUCTION AND SALES OF GOLD, 2004-2013 51
TABLE 22: SOUTH AFRICA‟S GOLD MINES, EMPLOYMENT AND REMUNERATION,
2009 – 2013 55
TABLE 23: SA PGMs MINE PRODUCTION AND SALES, 2013 57
TABLE 24: LONDON BASE PRICES OF PGMs, 2013 60
TABLE 25: EMPLOYMENT (INCLUDING CONTRACTORS) AND REMUNERATION IN SOUTH
AFRICA'S PGM MINES, 2013 62
TABLE 26: SOUTH AFRICA‟S PRODUCTION AND SALES OF SILVER, 2004-2013 64
TABLE 27 SOUTH AFRICA‟S PRODUCTION AND SALES OF ENERGY COMMODITIES, 2013 68
TABLE 28: EMPLOYMENT AND GROSS REMUNERATION ON MINES AND PLANTS IN THE
SOUTH AFRICAN ENERGY INDUSTRY, 2005 – 2013 69
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TABLE 29: WORLD COAL RESERVES, PRODUCTION AND EXPORTS, 2013 71
TABLE 30: SOUTH AFRICA‟S PRODUCTION AND SALES OF SALEABLE COAL, 2004 – 2013 72
TABLE 31: SOUTH AFRICA‟S PRODUCTION AND SALES OF ANTHRACITE, 2004 – 2013 73
TABLE 32: SOUTH AFRICA‟S BITUMINOUS COAL PRODUCTION AND SALES, 2004 – 2013 73
TABLE 33: SOME OF THE COAL MINES PROJECTS IN THE PAST FIVE YEARS 83
TABLE 34: EMPLOYMENT IN THE COAL SECTOR, 2004 – 2013 84
TABLE 35 – WORLD RESERVES AND PRODUCTION OF OIL AND NATURAL GAS, 2013 87
TABLE 36: EMPLOYMENTS IN THE HYDROCARBONS SECTOR 91
TABLE 37: WORLD URANIUM RESOURCES AND PRODUCTION, 2011 95
TABLE 38: WORLD NUCLEAR POWER REACTORS AND URANIUM REQUIREMENTS,
2013-2014 97
TABLE 39: SOUTH AFRICAN PRODUCTION AND SALES OF NON-FERROUS METALS AND
MINERALS, 2012 AND 2013 103
TABLE 40: SOUTH AFRICA‟S NON-FERROUS METALS AND MINERALS: EMPLOYMENT AND
GROSS REMUNERATION, 2009-2013 104
TABLE 41: WORLD ALUMINIUM SMELTER CAPACITY, PRODUCTION AND EXPORTS, 2013 106
TABLE 42: EMPLOYMENT AND REMUNERATION IN SOUTH AFRICA‟S ALUMINIUM
SMELTERS IN 2013 109
TABLE 43: WORLD RESERVES AND PRODUCTION OF ANTIMONY CONCETRATES, 2013 113
TABLE 44: EMPLOYMENT AND REMUNERATION IN THE ANTIMONY SECTOR IN 2013 116
TABLE 45: WORLD RESERVES AND MINE PRODUCTION OF COBALT, 2013 119
TABLE 46: SOUTH AFRICA‟S LOCAL AND EXPORT SALES OF COBALT, 2004-2013 120
TABLE 47: REFINED COBALT PRODUCTION BY COUNTRY, 2012 AND 2013 121
TABLE 48: WORLD RESERVES, MINE PRODUCTION AND EXPORTS OF COPPER IN 2013 125
TABLE 49: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORT OF COPPER
2004-2013 126
TABLE 50: EMPLOYMENT AND REMUNERATION IN SOUTH AFRICA‟S COPPER MINES IN
2013 128
TABLE 51: WORLD RESERVES, MINE PRODUCTION AND EXPORTS OF LEAD, 2013 131
TABLE 52: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF LEAD
2004-2013 132
TABLE 53: EMPLOYMENT AND REMUNERATION IN SOUTH AFRICA‟S LEAD MINES IN 2013 135
TABLE 54: WORLD NICKEL RESERVES AND MINE PRODUCTION, 2013 138
TABLE 55: SOUTH AFRICA‟S PRODUCTION AND SALES OF NICKEL, 2003 – 2013 139
TABLE 56: WORLD REFINED NICKEL PRODUCTION, 2013 139
TABLE 57: EMPLOYMENT IN THE PRIMARY NICKEL SECTOR 142
TABLE 58: GLOBAL NICKEL MAJOR PROJECTS 143
TABLE 59: WORLD RESERVES AND MINE PRODUCTION OF TITANIUM CONCENTRATES,
2013 146
TABLE 60: SOUTH AFRICA‟S TITANIUM PRODUCTION AND SALES, 2005 – 2013 147
TABLE 61: EMPLOYMENT AND REMUNERATION IN THE TITANIUM SECTOR IN 2013 150
TABLE 62: WORLD RESERVES, MINE PRODUCTION AND EXPORTS OF ZINC, 2013 153
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TABLE 63: SOUTH AFRICA‟S PRODUCTION AND SALE OF ZINC METAL IN CONCETRATE
2004-2013 154
TABLE 64: EMPLOYMENT AND REMUNERATION IN SOUTH AFRICA‟S ZINC MINES IN 2013 157
TABLE 65: WORLD RESERVES AND MINE PRODUCTION OF ZIRCON CONCENTRATES, 2013 159
TABLE 66: SOUTH AFRICA‟S PRODUCTION AND SALES OF FERROUS MINERALS, 2013 163
TABLE 67: SOUTH AFRICA‟S PRODUCTION AND SALES OF FERROALLOYS, 2013 164
TABLE 68: SOUTH AFRICA‟S FERROUS MINE EMPLOYMENT AND GROSS REMUNERATION
2009-2013 164
TABLE 69: WORLD CHROME ORE RESERVES, PRODUCTION AND EXPORTS, 2013 166
TABLE 70: SOUTH AFRICA‟S CHROME ORE PRODUCTION AND SALES, 2004 – 2013 167
TABLE 71: WORLD FERROCHROME PRODUCTION AND SALES, 2013 168
TABLE 72: SOUTH AFRICA‟S FERROCHROME PRODUCTION AND SALES, 2004 – 2013 169
TABLE 73: EMPLOYMENT IN SOUTH AFRICA‟S CHROME INDUSTRY, 2013 170
TABLE 74: WORLD IRON ORE RESERVES, PRODUCTION AND EXPORTS, 2013 172
TABLE 75: SOUTH AFRICA‟S PRODUCTION AND SALES OF IRON ORE 173
TABLE 76: SOUTH AFRICA‟S IRON ORE INDUSTRY‟S EMPLOYMENT AND REMUNERATION 175
TABLE 77: WORLD MANGANESE ORE RESERVES, PRODUCTION AND EXPORTS, 2013 177
TABLE 78 SOUTH AFRICA‟S MANGANESE ORE PRODUCTION AND SALES, 2003 – 2013 178
TABLE 79: SOUTH AFRICA‟S FERROMANGANESE PRODUCTION & SALES, 2003 – 2013 178
TABLE 80: SOUTH AFRICA‟S PRODUCTION AND SALES OF OTHER MANGANESE ALLOYS,
2003 – 2013 179
TABLE 81: SOUTH AFRICA‟S MANGANESE ORE INDUSTRY‟S EMPLOYMENT AND
REMUNERATION 181
TABLE 82: SOUTH AFRICA‟S PRODUCTION AND SALES OF FERROSILICON, 2004 – 2013 183
TABLE 83: SOUTH AFRICA‟S PRODUCTION AND SALES OF SILICON METAL, 2004 – 2013 184
TABLE 84: SOUTH AFRICA‟S PRODUCTION AND SALES OF VANADIUM, 2004 – 2013 187
TABLE 85: EMPLOYEMENT IN SOUTH AFRICA‟S VANADIUM INDUSTRY, 2009-2013 188
TABLE 86: SOUTH AFRICA‟S PRIMARY INDUSTRIAL MINERAL PRODUCTION AND SALES,
2012 195
TABLE 87: SOUTH AFRICA‟S PRIMARY INDUSTRIAL MINERAL PRODUCTION AND SALES,
2013 196
TABLE 88: SOUTH AFRICA‟S IMPORTS OF SELECTED PRIMARY INDUSTRIAL MINERAL
COMMODITIES, 2011 – 2013 197
TABLE 89: SOUTH AFRICA‟S IMPORTS OF MANUFACTURED INDUSTRIAL MINERALS
COMMODITIES, 2010 – 2012 198
TABLE 90: SOUTH AFRICA'S SALES OF SAND AND AGGREGATE BY MASS, 2004 – 2013 199
TABLE 91: SOUTH AFRICA‟S AGGREGATE AND SAND QUARRIES EMPLOYMENT AND
REMUNERATION, 2009 – 2013 201
TABLE 92: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF ANDALUSITE,
2004–2013 205
TABLE 93: SOUTH AFRICA‟S ALUMINO-SILICATE MINES: EMPLOYMENT, 2006–2012 206
TABLE 94: SOUTH AFRICA‟S LOCAL SALES AND EXPORTS OF DIMENSION STONE
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2004 – 2013 209
TABLE 95: SOUTH AFRICA‟S DIMENSION STONE EMPLOYMENT AND REMUNERATION,
2009 – 2013 211
TABLE 96 - SOUTH AFRICA‟S PRODUCTION AND SALES OF FLUORSPAR, 2004 – 2013 214
TABLE 97: SOUTH AFRICA‟S FLUORSPAR QUARRIES: EMPLOYMENT AND REMUNERATION,
2007-2013 215
TABLE 98: SOUTH AFRICA‟S PRODUCTION AND LOCAL SALES OF LIMESTONE AND
DOLOMITE FOR NON-AGGREGATE USE, 2004 – 2013 218
TABLE 99: SOUTH AFRICA‟S LOCAL SALES OF LIMESTONE AND DOLOMITE BY
APPLICATION, 2004 – 2013 219
TABLE 100: SOUTH AFRICA‟S LOCAL SALES OF LIME, 2012 – 2013 221
TABLE 101: SOUTH AFRICA‟S LIMESTONE AND DOLOMITE QUARRIES: EMPLOYMENT AND
REMUNERATION, 2004 – 2013 222
TABLE 102: SOUTH AFRICA'S PRODUCTION AND SALES OF PHOSPHATE ROCK,
2001– 2013 226
TABLE 103: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND IMPORTS OF KAOLIN,
2002-2013 233
TABLE 104: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF BENTONITE,
2002-2013 234
TABLE 105: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF ATTAPULGITE,
2002-2013 235
TABLE 106: WORLD PRICES OF KAOLIN AND BENTONITE, 2012-2013 236
TABLE 107: SOUTH AFRICA‟S SPECIAL CLAYS EMPLOYMENT, 2009-2013 237
TABLE 108: SOUTH AFRICA‟S PRODUCTION OF SULPHUR IN ALL FORMS, 2012-2013 240
TABLE 109: SOUTH AFRICA‟S PRODUCTION AND SALES OF SULPHUR IN ALL FORMS,
2003-2013 241
TABLE 110: SOUTH AFRICA‟S IMPORTS OF SULPHUR, 2007 – 2013 241
TABLE 111: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF VERMICULITE,
2003 – 2013 246
TABLE 112: SOUTH AFRICA‟S IMPORTS OF NATURAL ABRASIVES, 2004–2013 250
TABLE 113.1: SOUTH AFRICA‟S PRODUCTION AND LOCAL SALES OF BARYTES, 2004–2013 250
TABLE 113.2: SOUTH AFRICA‟S IMPORTS OF BARYTES, 2004–2013 251
TABLE 114: SOUTH AFRICA‟S IMPORTS OF DIATOMACEOUS EARTH, 2004–2013 251
TABLE 115: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF FELDSPAR,
2004–2013 252
TABLE 116: SOUTH AFRICA‟S IMPORTS OF NATURAL GRAPHITE, 2004–2013 252
TABLE 117.1: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES, AND CONSUMPTION OF
NATURAL GYPSUM, 2004–2013 253
TABLE 117.2: SOUTH AFRICA‟S IMPORTS OF GYPSUM AND GYPSUM PLASTERS,
2004–2013 253
TABLE 118.1: SOUTH AFRICA‟S PRODUCTION AND LOCAL SALES OF MAGNESITE AND
DERIVED PRODUCTS, 2004–2013 254
xiii
TABLE 118.2: SOUTH AFRICA‟S IMPORTS OF MAGNESITE AND MAGNESIA, 2004–2013 254
TABLE 119.1: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF SCRAP AND
FLAKE MICA, 2004–2013 255
TABLE 119.2: SOUTH AFRICA‟S IMPORTS OF MICA, 2004–2013 255
TABLE 120: SOUTH AFRICA‟S PRODUCTION AND SALES OF MINERAL PIGMENTS,
2004–2013 256
TABLE 121: SOUTH AFRICA‟S IMPORTS OF POTASH, 2004–2013 256
TABLE 122: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF
PYROPHYLLITE, 2004–2013 257
TABLE 123: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF SALT,
2004–2013 257
TABLE 124: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF SILICA,
2004–2013 258
TABLE 125.1: SOUTH AFRICA‟S PRODUCTION AND SALES OF TALC, 2004–2013 258
TABLE 125.2: SOUTH AFRICA‟S IMPORTS OF TALC, 2004–2013 259
xiv
ABBREVIATIONS AND SYMBOLS
A$ Australian dollar LME London Metal Exchange
bbl barrel m metre
bbl/d barrels per day m3 cubic metre
BGS British Geological Survey Ma million years
billion thousand million mic metal-in-concentrate
CIF cost, insurance, freight Mct million carats
CIS Commonwealth of Independent States. Par Mozt million ounces troy
of the former Union of Soviet Socialist Mozt/a million ounces troy per annum
Republics (USSR) Mt megaton (million tons)
China People‟s Republic of China Mt/a million tons per annum
CPI Consumer price index MVA megavolt ampere
conc concentrate carat ct carat MWh megawatt hour
ct carat na not available
DM Deutsche Mark nar not as received
DMR Department of Mineral Resources ns not specified
DRC Democratic Republic of Congo NW North West Europe
DRI Direct reduced iron ozt troy ounce
e estimate pa per annum
EAF Electric-arc furnace PGMs platinum-group metals
EU European Economic Union ppm parts per million
FOB free on board R rand (South African currency)
FOR free on rail SA South Africa
FSU Former Union of Soviet Socialist Republics S.ton Short ton
(USSR) t metric ton
g gram t/a tons per annum
Ga giga year TCF trillion cubic feet
g/t gram per ton UAE United Arab Emirates
GAR gross as received US United States of America
GWe net gigawatts electric USBM United States Bureau of Mines
ILZSG International Lead and Zinc Study Group USGS United States Geological Survey
INSG International Nickel Study Group w withheld
kcal kilocalorie WBMS World Bureau of Metal Statistics
kg kilogram y year
kg/t kilogram per metric ton y-o-y year-on-year
km kilometre $ US dollar, unless stated otherwise
kt kiloton C$ Canadian dollar
kt/a kiloton per annum £ British pound sterling
lb pound avoirdupois % per cent
xv
EXPLANATORY NOTES
Reference Due to space limitations, only the sources of statistical information are given. The
absence of a source reference to statistical data indicates that such data was
sourced from the Directorate: Mineral Economics database of mineral production,
sales and labour in South Africa. A bibliography is presented in Part Three.
Mineral Resource Mineral Resource covers in situ mineralisation as well as dumps or tailings, which
have been identified and estimated through exploration/assessment and sampling
from which mineral reserves may be derived by the application of modifying
factors.
Minerals Reserve In this publication, mineral reserve refers to the economically mineable material
derived from a measured and indicated mineral resource. It includes diluting
materials and allows for losses that are expected to occur when the material is
mined. Appropriate assessment to a minimum of pre- feasibility study for a project
or a Life of Mine Plan for an operation, must have been carried out, including
consideration of, and modification by, realistically assumed mining, metallurgical,
economic, marketing, legal, environmental, social and governmental factors.
1
PART ONE: SOUTH AFRICA’S MINERAL INDUSTRY
GENERAL REVIEW
P Mwape, M Mnguni, N Jali and K Menoe
INTRODUCTION
The South African mining and minerals industry has played a key role in the country‟s economic
development, which has transformed South Africa into the most industrialised country in Africa. It has also
been the principal driver of the current infrastructure network which now underpins jobs in many other
sectors. The South African government‟s development policies, the National Development Plan (NDP) and
the New Growth Path (NGP), both recognise the critical role that mining contributes in growing
investments, exports, gross domestic product (GDP) and job creation. In this respect government,
organised labour and industry have, through the Mining Industry Growth, Development and Employment
Task Team (MIGDETT) undertaken several initiatives aimed at resolving the challenges facing the
industry.
Other policy interventions aimed at addressing structural imbalances and tackle high levels of
unemployment, poverty and inequality have either been developed or are currently being developed.
Principal amongst these are the National Development Plan (NDP), Developmental Growth Path (DGP),
Industrial Policy Action Plan (IPAP), the Ten Year Innovation Strategy as well as the Beneficiation
Strategy. The IPAP identifies areas where employment could be leveraged and Key Action Plans (KAPs) to
achieve the employment growth.
The mining industry is a well-established and resourceful sector of South Africa‟s economy and has a high
degree of technical expertise as well as the ability to mobilize capital for new development. It has provided
the impetus for the development of an extensive and efficient physical infrastructure and has contributed
greatly to the establishment of the country‟s secondary industries. With the diversity and abundance of its
natural resources, South Africa is a leading producer and supplier of a range of minerals and produced
approximately 53 different minerals from 1 712 mines and quarries in 2013. Gold was produced from 53
mines, platinum-group metals (PGMs) from 43 mines, coal from 143 mines and diamonds from 388 mines,
all as primary commodities.
STRUCTURE OF THE MINING INDUSTRY
South Africa, now in its second decade of a constitutional democracy endorsed the principles of private
enterprise within a free-market system, offering equal opportunities for its entire people. The State‟s
influence within the mineral industry is not only confined to orderly regulation and the promotion of equal
opportunity for all its citizens and investors, but also participates in mining operations through state owned
2
companies like Alexkor, African Exploration Mining and Finance Corporation (Pty) Ltd (AEMFC) and the
Industrial Development Corporation (IDC).
Transformation
Corporate restructuring of the South African mining industry remains an ongoing exercise. The introduction
of the Mining Charter in South Africa was aimed at transforming the mining industry to redress historical
imbalances, so that the industry is aligned with the changes in the country‟s overall transformation of its
social, political and economic landscape.
The transformation of the mining industry has included the consolidation of ownership through minority
buy-outs, separation of large diversified companies into two or more specialised companies as well as the
purchase of South African mining assets by foreign companies.
Associations involved in the South African mining industry include:
Business
The Chamber of Mines of South Africa is a voluntary, private sector employers‟ organisation founded in
1889, three years after gold was discovered on the Witwatersrand. The Chamber is an association of
mining companies and mines operating in the gold, coal, diamond, platinum and other mineral commodity
sectors. Today, the organisation acts as the principal advocate of the major policy positions endorsed by
mining employers. The Chamber represents the formalised views of its membership to various organs and
spheres of government, and to other relevant policy-making and opinion-forming entities, both within and
outside the country.
The South African Mining Development Association (SAMDA), which was formed in 2000 as a junior
mining initiative by a group of people associated with various South African junior and BEE mining
companies, aims to create an enabling environment for raising finance, developing technical and other
skills, practising responsible environmental management and sustainable development as well as the
maintenance of standards of good practice in the junior mining sector.
Voluntary Associations
The Southern African Institute of Mining and Metallurgy (SAIMM), was founded 115 years ago in
1894. The SAIMM is a professional institute with local and international links aimed at assisting
member‟s source news and views about technological developments in the mining, metallurgical
and related sectors as well as embracing a professional code of ethics. (www.saimm.co.za).
South African Colliery Managers Association (SACMA). (www.Sacollierymanagers.org.za)
Association of Mine Managers South Africa (AMMSA). (www.ammsa.org.za)
3
Geological Society of South Africa (GSSA)
Engineering Council of South Africa (ECSA)
South African for Natural Scientific Professions (SACNASP)
Statutory Associations:
Workers in the mining industry are represented by the following organisations:
The National Union of Mineworkers (NUM), which was formed on 4 December 1982. The NUM is
the largest recognised collective bargaining agent representing workers in the Mining, Construction
and Electrical Energy Industries in South Africa and the largest affiliate of the Congress of South
African Trade Unions (COSATU), with offices in all the South African Provinces.
The United Association of South Africa (UASA) also plays an important role in the international
labour arena, joining hands with various international federations that promote global solidarity
among workers of the world in their struggle against the negative effects of globalisation of the
economy. UASA is affiliated to the International Federation of Transport Workers (FIOST), the
International Confederation of Free Trade Unions (ICFTU), and the World Confederation of Labour
(WCL).
Solidarity is another movement, which represents the rights of its members and their communities.
The African Mineworkers and Construction Union (AMCU) formed in 1999, also represents
workers at chrome and platinum mines as well as workers at some coal mines in Mpumalanga and
KwaZulu-Natal. It is also recruiting at the iron ore and manganese mines around Kathu and
Hotazel in the Northern Cape. It focuses on vulnerable contract workers.
There are also many co-operative organizations, which serve the interests of the smaller groups and
independent operators, or specific sectors of the industry. These include the Aluminium Federation of
South Africa, the South African Copper Development Association, the Ferro-Alloy Producers Association,
the Engineering Industries Federation of South Africa, the Southern Africa Stainless Steel Development
Association, the Diggers Association and the Aggregate and Sand Producers Association of South Africa.
Government
Ownership, access and opportunity in regard to the country's mineral and petroleum resources are
regulated by the Mineral and Petroleum Resources Development Act of 2002 (Act No. 28 of 2002)
(MPRDA), which recognises the State's custodianship over the country's mineral and petroleum resources.
The MPRDA regulates the prospecting for, and optimal exploitation, processing and utilisation of minerals,
provides for safety and controls the rehabilitation of land disturbed by exploration and mining. This Act
4
defines the entire regulatory environment of the minerals industry, from rights and ownership to mineral
sales and beneficiation.
The Act‟s main objectives are to:
recognize State custodianship of all mineral and petroleum resources within the Republic of South
Africa;
promote equitable access to the nation's mineral and petroleum resources, especially among
historically disadvantaged South Africans;
promote investment, growth and employment in the mineral and petroleum industry thus
contributing to the country‟s economic welfare;
provide for security of tenure in respect of existing prospecting, exploration, mining and production
operations;
give effect to section 24 of the Constitution by ensuring that the nation's mineral and petroleum
resources are developed in an orderly and ecologically sustainable manner; and
ensure that holders of mining and production rights contribute towards the socio-economic
development of the areas in which they are operating.
Recognizing State custodianship of natural resources has brought South Africa in line with international
best practices consistent with UN Resolution 1803 governing States‟ Permanent Sovereignty over Natural
Resources. This more universally recognized mineral rights system has led to the freeing-up of unused old
order rights and hitherto effectively sterilized privately-owned mineral rights in prospective mineral terrains,
which attracts international exploration and mining companies and increases the level of competition
among local players.
The Act also aims to assist historically disadvantaged South Africans aspiring to conduct prospecting or
mining activities, with the proviso that such assistance is fair and equitable and does not harm the interests
of other parties. The Act provides security of tenure for owners of existing rights, or for those whose
applications were being processed at the time of enactment and guarantees security of tenure in respect of
prospecting and mining operations. Furthermore, this gives the holder of an “old order” mineral right an
opportunity to comply with the provisions of the Act and also promotes equitable access to the country‟s
mineral and petroleum resources.
The Advantages of the New System of State Custodianship of Mineral Rights in South Africa
The change from a dual system of ownership to a singular system where the State controls the
ownership of mineral rights on behalf of the nation has facilitated access to potential mineral terrains
for new entrants into the mining and minerals industry thus stimulating private sector activity.
5
State control of mineral rights removes difficulties in legal and administration costs and delays caused
by a fragmented mineral right holdings structure.
The system of State custodianship of mineral rights enables the state to enforce the submission and
release of exploration information, thereby avoiding the duplication of exploration activities.
State custodianship of mineral rights prevents the hoarding of mineral rights and allows equal and
equitable access to potential investors.
Review of the Mining Charter
The Department is currently finalising the mining charter assessment process to determine the mining
industry‟s compliance with the Mining Charter targets set for 2010 to 2014 milestones. This is the
continuation of the initial assessment conducted in 2009 aimed at ensuring meaningful and effective
transformation within the mining sector.
Other Mining Policy and Legislative Amendments
Chapter XVI of the Mining Rights Act, (Act No 20 of 1967) in the form of the Precious Metals Act,
2005 (Act No. 37 of 2005)
The Diamonds Act, 1986 (Act No 56 of 1986) in the form of the Diamonds Amendment Act, 2005
(Act No 29 of 2005), and the Diamonds Second Amendment Act, 2005 (Act No 30 of 2005).
Geosciences Amendment Act, 2010 (Act No. 16 of 2010
The Geoscience Amendment Act (16/2010) Draft Regulations
The Housing and Living Conditions Standards for the Mining and Mineral Industry, 2009,
The Codes of Good Practice for the Mining and Mineral Industry, 2009
Section 22 (5) Guidelines
African Exploration Mining and Finance Corporation Bill 2015 (AEMFC Bill)
The objective of the Precious Metals Act is to provide for the acquisition, possession, smelting, refining,
beneficiation, use and disposal of precious metals. Precious metals include gold and the platinum group
metals (PGMs). Since silver is produced as a by-product and has a low value (price) compared to other
precious metals, it is excluded from the definition of precious metals.
The Diamonds Amendment Acts, 2005 (Act No. 29 of 2005 and Act No. 30 of 2005)
The rationale for the amendment of the Diamonds Act, 1986 (Act No.56 of 1986) was: to increase access
to rough diamonds for jewellery manufacturing in South Africa, to maintain security of supply of rough
diamonds, and to promote the beneficiation of diamonds in South Africa, thus creating jobs and increasing
participation especially by Historically Disadvantaged South Africans throughout the diamond value chain.
6
Housing and Living Conditions for the Mineral Industry
The Housing and Living Conditions were gazetted in April 2009, with the objective of developing basic
guidelines for suitable housing and living conditions standards for mine workers.
The codes of good practice were first published in April 2009 for implementation as of the 1st of May 2009.
The review of the codes initiated in September 2010 was influenced by the need identified by the
department to facilitate the creation and development of relevant avenues for human resources and
economic development within mining communities. The need identified was also to ensure sustainable
development and economic growth in line with the Broad Based Socio-Economic Empowerment Charter
for the South African Mining and Minerals Industry.
Drafts of reviewed Codes were developed and referred to the Minister who has since approved them for
consultation purposes. The purpose of the review is to outline ethical standards to be adhered to by all
mining industry stakeholders in respect of fronting, labour practices, fair business practices, beneficiation,
community upliftment, employee welfare, sustainable development and safe mineral exploitation. In the
Draft Review of the Codes of Good Practice, stakeholders commit to exercising ethical behaviour, respect
for employees‟ rights and to promote economic development within mine communities.
Extensive consultation with all relevant stakeholders on the Draft Reviewed Codes will be conducted after
the Minister has approved the Draft Reviewed Codes document. It is expected that once the Codes of
Good Practice are implemented, the industry will reflect the vision of non-racial, non-sexist and prosperous
South Africa. The setting up of administrative principles will also facilitate the effective implementation of
the minerals and mining legislation and enhance the implementation of the Broad-Based Socio-Economic
Charter as applicable to the mining industry as well as to give effect to section 100(1) (b) of the Mineral and
Petroleum Resources Development Act, 2002.
Geoscience Amendment Act 16 of 2010
Following an extensive consultative process, a Draft Amendment Bill was prepared and tabled in
Parliament in June 2010. In September 2010, the Bill was considered by the Parliamentary Portfolio
Committee and approved by the National Assembly in late November 2010. The President of the Republic
assented to and signed the Bill into law on the 3rd of December 2010. The Act was proclaimed by the
President on the 28th of May 2012 with the exception of certain sections. The excluded sections were
suspended from coming into operation due to a lack of financial resources to implement same by the CGS.
These will be put into operation once the CGS has secured the requisite funds from National Treasury.
The main objectives of the Amendment Act are to mandate the Council for Geoscience to be the custodian
of geotechnical information, to be the national advisory authority in respect of geo-hazards related to
7
infrastructure and development, and to undertake reconnaissance operations, prospecting, research and
other related activities in the mining sector.
The Geoscience Amendment Act (16/2010) Regulations
Consequent to the promulgation of the Amendment Act, the DMR‟s Mineral Policy Development
Directorate, together with the Council for Geoscience, developed Draft Regulations. The purpose of the
regulations is to prescribe the processes, procedures and requirements for compliance with the
Amendment Act. All the relevant stakeholders will be consulted on the Draft Regulations.
Section 22 (5) Guidelines (MPRDA of 2002)
In March 2011, comprehensive section 22 (5) guidelines were prepared. The purpose of the guidelines is
to create an enabling environment for the Department to facilitate the processing of applications made in
terms of section 22 (5), which empowers the Minister to exercise his/her discretion by publishing a notice in
the Government Gazette inviting applications for mining rights in respect of specific land.
The guidelines are aimed at achieving the following objectives:
optimal mining of South Africa‟s mineral resources;
promotion of investment in the mining and minerals industry;
equitable access to the nation‟s mineral resources;
substantial and meaningful opportunities for historically disadvantaged persons;
promotion of economic growth and mineral resources development;
promotion of employment and advancement of the social and economic welfare of all South
Africans..
The draft guidelines were approved by the Director General (DG) and the Minister for implementation.
Mineral and Petroleum Resources Development Amendment Bill 2013
The objectives of the amendment are:
improve the current construct of the Act to remove ambiguities,
make provision for a comprehensive consultation process with landowners, lawful occupiers and
interested and affected parties, make provision for enhanced sanctions,
Streamline the licensing processes and provide for a single regulatory authority. provide for
regulation of associated minerals, partitioning of rights and enhance provisions relating to the
regulation of the mining industry through beneficiation of minerals or mineral products;
provide for active State participation in petroleum exploration and production;
promote national energy security; and
8
align the Mineral and Petroleum Resources Development Act with the Geoscience Act, 1993 (Act
No. 100 of 1993).
The Amendment Bill was tabled before Parliament in 2013 and dully considered by the Portfolio Committee
on Mineral Resources through extensive public hearings involving all interested and affected parties, in
particular, the petroleum industry, environmental groups, the legal fraternity and communities. The DMR
responded comprehensively to all concerns raised on the Amendment Bill in this process.
The key provisions of the Bill include among others the introduction of the integrated licensing regime, the
concept of active State participation in the exploitation of the nation‟s petroleum resources, determination
of strategic minerals by the Minister, mineral beneficiation, improvements on regulation of Social and
Labour Plans (SLP‟s), substitution of the first come first serve system with an application process by
invitation and enhanced sanctions. The Bill has been through the both houses of Parliament and was
referred by the National Assembly to the President for assent in April 2014. The President has referred the
Bill back to the National Assembly (NA) for reconsideration in terms of section 79 (1) of the Constitution on
the basis that he has reservations regarding certain aspects of the Bill. The reservations relate to the
constitutionality of the Bill, conflicts with international trade agreements, insufficient consultation by the
National Council of Provinces and consultation with Traditional Authorities. The Bill is currently with NA for
reconsideration as per the President‟s referral.
African Exploration Mining and Finance Corporation Bill 2015 (AEMFC Bill)
The department is in the process of developing a draft Bill referred to as the African Exploration Mining and
Finance Corporation Bill, 2015. The purpose of the AEMFC Bill is to provide for :
(a) establishment of African Exploration Mining and Finance Corporation as a creature of statute;
(b) consolidation of the directly held State interest in mining assets;
(b) objects and functions of the African Exploration Mining and Finance Corporation;
(b) constitution of its Board and the management of the African Exploration Mining and Finance
Corporation by the Board;
(c) finances of the African Exploration Mining and Finance Corporation; and
(d) Chief Executive Officer and the staff of the African Exploration Mining and Finance Corporation;
The draft Bill has been forwarded to the Office of the Chief State Law Adviser (OCSLA) for pre-certification.
The OCSLA has certified that the draft Bill conforms with the requirements of the Constitution. The draft Bill
will be published for public comments upon Cabinet approval.
9
International Organisations/Associations
Association of African Diamond Producing Countries (ADPA)
ADPA is an association of diamond producing African countries, 11 of which have full membership while
seven only enjoy observer status. The Association is chaired on a rotational basis and in July 2012, Ghana
took over chairpersonship from the Democratic Republic of Congo during the annual Council of Ministers‟
meeting held in Accra, Ghana. The ADPA Secretariat was in consultation with the Council of Mining
Ministers to host the meeting later in 2014, following postponement of the 2013 meeting which was
supposed to be held in Guinea Conakry. However, the 2014 Council of Mining Minister‟s meeting could not
be held due elections and the Ebola outbreak in 2013 and 2014 respectively. The main focus of ADPA
revolves around the implementation of aligned policies and strategies intended to maximize the benefits
derived from revenues of diamonds across the African continent. In so doing ADPA explores the
development of a best practice document that will promote the realisation of harmonised policies across
Africa with a goal to increase foreign investments into the diamond sector for the benefit of all member
States.
The Kimberley Process (KP)
South Africa is one of the founding members of the Kimberley Process (KP), which brought into existence
the Kimberley Process Certification Scheme (KPCS). The KP was established when diamond producing
countries convened in Kimberley, South Africa in May 2000, to discuss ways to stem the trade in „conflict
diamonds‟ and ensure that the diamond trade was not fuelling armed conflicts. In December 2000, the
United Nations General Assembly adopted a landmark Resolution 55/56 of 2000, which supported the
establishment of an international certification scheme for rough diamonds. By November 2002,
negotiations between governments, the international diamond industry and civil society organisations
resulted in the creation of the KPCS, which was launched in Kimberley, South Africa in 2003.
As one of the founding members of the KPCS, South Africa played a pivotal role in the establishment of the
KPCS as well as the harmonisation of the regulatory framework relating to the sale and export of
diamonds. The KPCS has 54 participants representing 81 countries that counts for 99.8 precent of the
global production of rough diamonds.
The KPCS core document (statutes) governs the global production of rough diamonds and stipulate the
objectives, definitions, internal controls and, most importantly, minimum requirements that each participant
must comply with. The People Republic of China hosted KPCS Intercessional and Plenary meetings in
June and November 2014, respectively. The Republic of Angola assumed KPCS Chairpersonship from the
1st of January 2015 for the next twelve months.
10
Department of Mineral Resources (DMR)
The Department of Mineral Resources (DMR) assumes the custodianship of all mineral resources in the
Republic of South Africa on behalf of its citizens. To this end, the Department promotes and regulates the
Minerals and Mining Sector for transformation, growth and development as well as ensures that all South
Africans derive sustainable benefit from the country‟s mineral wealth. Various specialised divisions of the
DMR and associated institutions are responsible for the administration of the mining and regulations
(Figure 1) and for promoting the development of the industry. Mining is regulated by three branches,
namely the Mineral Policy and Promotion Branch, Mineral Regulation Branch and the Mine Health and
Safety Inspectorate.
The Mineral Policy and Promotion Branch is responsible for formulating mineral related policies and helps
promote the mining and minerals industry of South Africa in order to make it attractive to investors. The
branch consists of four Chief Directorates: Mineral Policy, which develops new policies, reviews existing
policies and amends legislation to promote investment growth and achieve transformation in the minerals
and mining industry; Economic Advisory Services that undertakes macroeconomic research and analysis,
to inform Executive Management and the department in their engagements with industry stakeholders;
Mineral Promotion promotes mineral development and advises on trends in the mining industry to attract
additional investment,; and Mine Environmental Management that provides strategic guidance to mine
environmental management and mine closure issues, including the management of derelict and ownerless
mines.
11
FIGURE 8: SUMMARY OF SOUTH AFRICA‟S ADMINISTRATION OF MINERAL LAWS
Source: DMR
The Mineral Regulation Branch regulates the minerals and mining sector to promote economic growth,
employment, transformation and sustainable development. Mineral Regulation is also responsible for the
administration of prospecting and mining rights licensing and compliance with the Mineral and Petroleum
Resource Development Act, 28 2002 (the Act), including environmental management compliance by
mines.
The Mineral Regulation branch consists of four Chief Directorates that are accountable for all matters
relating to mineral regulation within the nine regions. The Central Region is responsible for Free State and
Northern Cape provinces; Western Region for Gauteng and North West provinces; Northern Region for
Limpopo and Mpumalanga provinces; while the Coastal Region is responsible for KwaZulu Natal and
Eastern and Western Cape provinces.
The Mine Health and Safety Inspectorate (MHSI) is responsible for implementing mine health and safety
legislation. The Inspectorate ensures the safe mining of minerals under healthy working conditions and is
represented in the various provinces by Principal Inspectors.
The branch is comprised of two sub – programmes which are: Mine Health and Safety (Regions)
responsible for audits, inspections, investigations, enquiries, enforcing the Mine Health and Safety Act and
its provisions, examination services and providing professional advice; and Governance Policy and provide
Diamonds Act, 1986 (Act No 56 of 1986)
Diamond Amendment Act, 2005
(Act No 29 of 2005)
Diamond Amendment Act, 2005 (Act No 30 of 2005)
Precious Metal Act, 2005
(Act No 37 of 2005)
Mines and World Act, 1956
(Act No 27 of 1956 (Section 9)
Mining Titles Registration Amendment Act, 2003
(Act No. 24 of 2003)
Mineral Technology Act, 1989
(Act No. 30 of 1989)
Minerals and Petroleum Resources Development Act
(Act No. 28 of 2002)
Geoscience Act, 1993
Act No. 100 of 1993)
Geoscience Amendment Act, 16 of 2010
(
Mine Health and Safety Act, 1996
(Act No. 29 of 1996) as amended
ADMINISTRATION OF LAWS
DMR
12
technical support to regional offices, chair tripartite structures and facilitate HIV and AIDS work in the
sector.
Through the Mine Health and Safety Council (MHSC), the inspectorate provides leadership and
participates in initiatives and activities of tripartite institutions to respond to current health and safety
challenges. The MHSC is a national public entity (schedule 3A) established in terms of the Mine Health
and Safety Act, No 29 of 1996 as amended. The main task of the Council is to advice the Minister of
Mineral Resources on occupational health and safety legislation and research outcomes focused on
improving and promoting health and safety in South African mines.
The MHSC continues to respond to health and safety challenges through implementation of focused
programmes addressing milestones agreed upon by stakeholders (labour, state and employers) during
their health and safety summit in 2003.
Resolutions made included that the mining sector will achieve a 20 percent decline in fatality and injury
rates per year and eliminate Silicosis and Noise Induced Hearing Loss by 2013. The setting, monitoring
and enforcement of health and safety standards within the South African mining industry are regulated
under the Mine Health and Safety Act 1996, (Act No. 29 of 1996). The Mine Health and Safety Act 29 of
1996 (“MHSA”), referred hereto as the Principal Act, was published in the Government Gazette in June
1996 and came into operation on the 15th of January 1997. The Principal Act was amended in 1997 by the
Mine Health and Safety Amendment Act 72 of 1997 with minimal changes.
In 2008 the Principal Act was further amended in detail by the Mine Health and Safety Amendment Act 74
of 2008. This Act 74 of 2008 addressed some challenges and shortcomings that had developed over the
years in the mining industry with regard to the enforcement of the MHSA. This Amendment Act came into
operation on the 1st of May 2009. Currently, the Mine Health and Safety Act is being reviewed
comprehensively;
to strengthen enforcement provisions; to simplify the administrative system for the issuing of fines;
to reinforce offences and penalties; to substitute and remove ambiguities in certain definitions and
expressions; and
to effect certain amendments necessary to ensure consistency with other laws, particularly the
Mineral and Petroleum Resources Development Act, 2002 (MPRDA).
The DMR in association with the following highly specialised associated institutions of government
conducts regulatory, promotional and various research activities
The Council for Geoscience (CGS) undertakes geological mapping and carries out studies
pertaining to the identification, nature, extent and genesis of ore deposits and also maintains
national databases of the country‟s geoscientific data and information.
13
Council for Mineral Technology (MINTEK) assists the minerals industry to operate more effectively
by developing and making available the most appropriate and cost-effective mineral recovery and
mineral beneficiation technologies. It is engaged in the full spectrum of minerals research: from the
mineralogical examination of ores to the development of processing, extraction and refining
technologies and also conducts research into: the production of added value products and
feasibility and economic studies. Much of this work is carried out in close liaison with the local and
international minerals and metallurgical industries.
The South African Nuclear Energy Corporation (NECSA) undertakes and promotes research and
development in the field of nuclear energy technology and radiation sciences in order to process
source material, special nuclear material and restricted material as described in Nuclear Energy
Act, No 146, 1999, Sections 2(a), 2(b) and 2(c).
The Council for Scientific and Industrial Research (CSIR) conducts, inter alia, research related to
specific minerals, brown fields mineral exploration, air quality, water pollution and purification, as
well as mining and mineral processing technologies. The CSIR‟s Division of Natural Resources
and Environment in the mining category focuses its research and development on the mining
industry. Major research activity in this division focuses on the most crucial challenges threatening
the health and safety of the underground workforce and overcoming a variety of technological
challenges that impact on profitability in the mining industry. The division conducts fundamental
research and technology development and provides general advice and assistance relating to the
improvement of the underground environment and strata control, reduction of hazardous
conditions associated with rock pressure in mining operations, as well as development of new or
improved mining systems and equipment.
The South African Diamond & Precious Metals Regulator (SADPMR) was established by Section 3
of the Diamonds Act, 1986 (as amended in 2005), and replaced the South African Diamond Board
which was de-listed as a Schedule 3A public entity in March 2007. The South African Diamond
Board was established in 1987 in terms of the Diamond Act, Act 56 of 1986 to regulate control over
possession, the purchase and sale of diamonds, and the processing and the export of diamonds.
The State Diamond Trader (SDT) is a state owned entity established in terms of Section 14 of the
Diamonds Amendment Act, 29 of 2005. The SDT‟s main business is to buy and sell rough
diamonds in order to promote equitable access to and beneficiation of diamond resources. The
main aim of the SDT is to address distortions in the diamond industry and correct historical market
failures to develop and grow South Africa‟s diamond cutting and polishing industry. The entity is
empowered by law and proclamation to purchase up to 10% of the run of mine stones from all
diamond producers in South Africa, and to sell to registered customers through an application and
approval process.
Petroleum Agency South Africa (PASA) promotes exploration for onshore and offshore oil and gas
resources and their optimal development on behalf of government, as designated in terms of the
Mineral and Petroleum Resources Development Act (MPRDA). The Agency regulates exploration
and production activities, and acts as the custodian of the national petroleum exploration and
production database.
14
Most of South Africa‟s institutions of higher education (universities and universities of technology)
are not only responsible for the training of professional and technical personnel required by the
mineral industry but also undertake mineral and/or mining research. The mining industry strives to
conform to strict professional ethics and competitive technical practices through organisations such
as the Geological Society of South Africa (GSSA), the Southern African Institute of Mining and
Metallurgy (SAIMM) and the South African Council for Natural Scientific Professions (SACNASP).
The Mining Qualifications Authority (MQA) plays a critical role by addressing skills shortages in the
mining industry through capacity development and process improvement. The MQA as established
by the MHSA, No. 29 of 1996, is mandated to ensure that the mining and mineral sector has
sufficient competent people who will improve health and safety.
MINERAL INDUSTRY STRENGTH
South Africa's mineral wealth has been built on the country's enormous resources most of which are
usually found in the following distinctive geological structures and settings:
• The Witwatersrand Basin yields some 93 percent of South Africa‟s gold output and contains
considerable resources of uranium, silver, pyrite and osmiridium;
• The Bushveld Complex hosts platinum group metals (with associated copper, nickel and cobalt
mineralisation), chromium and vanadium bearing titanium iron ore formations as well as large
deposits of the industrial minerals, including fluorspar and andalusite;
• The Transvaal Supergroup contains enormous resources of manganese and iron ore;
• The Karoo Basin extends through Mpumalanga, KwaZulu-Natal, Free State as well as Limpopo
Province hosting considerable bituminous coal and anthracite resources and shale gas
discoveries;
• The Palaborwa Igneous Complex hosts extensive deposits of copper, phosphate, titanium,
vermiculite, feldspar and zirconium ores;
• Kimberlite pipes host diamonds that also occur in alluvial, fluvial and marine settings;
• Heavy mineral sands contain ilmenite, rutile and zircon;
• Significant deposits of lead-zinc ores associated with copper and silver are found in the Northern
Cape near Aggeneys.
South Africa accounts for 96 percent of known global reserves of the platinum group metals (PGMs), 74
percent of chrome, 26 percent of manganese, 25 percent of vanadium and 11 percent of gold reserves
(Table 1). Since most of the identified mineral resources and reserves were discovered by means of
obsolete exploration methods, there is still significant potential for the discovery of other world-class
deposits in areas not yet thoroughly explored using modern exploration technologies. As a major mining
country, South Africa's strengths include a high level of technical expertise as well as comprehensive
research and development activities.
15
TABLE 4: SOUTH AFRICA‟S ROLE IN WORLD MINERAL RESERVES, PRODUCTION AND EXPORTS,
2013
Sources: USGS, BP statistical review of world energy 2013, Mineral Economics Directorate,
Notes: Full details given in respective commodity chapters
* Information not available
#Resource
COMMODITY
RESERVES
PRODUCTION
EXPORTS
Unit Mass % Rank Unit Mass % Rank Unit Mass % Rank
Aluminium * * * kt 823 1,7 10 kt 527,9
*
Alumino-silicates Mt 51 * * * * * * * * * *
Antimony kt 27 1,5 5 t 2 405 1,5 5
* * *
Chrome Ore Mt 6 751 74,1 1 kt 13 653 48,8 1 kt 7 663 53,2 1
Coal Mt 30 156 3,4 8 Mt 256,3 3,2 7 Mt 74,6 5,9 6
Copper Mt 11 1,6 11 kt 81 0,4 13 kt 26 0,3 12
Ferro-chrome * * * kt 3 426 37 1 kt 3 048 55,2 1
Ferro-Mn/Fe-Si-Mn * * * kt 790 * * kt 751 * *
Ferro-silicon * * * kt 83 2,4 7 kt 33 3,1 5
Fluorspar Mt 41 17,1 1 kt 155 2,7 4 kt 136 * *
Gold t 6 000 11,1 6 t 159,5 5,6 6 t 159,5 * *
Iron Ore Mt 650 0,8 12 Mt 72 3,6 7 Mt 58 4,3 3
Lead kt 3,7 5 7 kt 51,2 2,1 11 kt 40,5 * *
Manganese Ore Mt 150 26,3 1 kt 11 21,1 2 kt 8 30,8 1
Nickel Mt 3,7 5,0 7 kt 51,2 2,1 11 kt 40,5 * *
PGMs t 63 000 95,5 1 t 264,2 * 1 t 266,5 * *
Phosphate Rock Mt 1 500 2,2 5 kt 2 131 1,2 12 kt 170.9 * *
Silicon Metal * * * kt 53,0 2,5 8 kt 59,4 4,5 6
Silver * * * t 68,7 0,4 20 t * * *
Titanium Minerals Mt 71,3 9.5 4 kt 1 220 16,1 2 * * *
Uranium ktU 295# 8 5 MlbU 582 1,1 11 * * *
Vanadium kt 3 500 25 2 kt 20,0 33 2 kt 15,5 * *
Vermiculite Mt 14 * * kt 127.6 31 1 kt 118.3 * *
Zinc Mt 15 6 5 kt 30 0,2 27 kt 26 * *
Zirconium Mt 14 20.9 2 kt 360 25,0 2 * * *
16
INFRASTRUCTURE DEVELOPMENTS
South Africa ranks among the most sophisticated and promising emerging markets in the world. The
unique combination of a well-developed first-world economic infrastructure and a rapidly emerging market
economy, has given rise to an entrepreneurial and dynamic investment environment with many global
competitive advantages and opportunities. Being a leading producer and supplier of a range of minerals,
the country offers a highly competitive investment location ensuring that it can meet specific trade and
investment requirements of prospective investors and business people, whilst also meeting the
development needs of its populace.
The introduction and adoption of the National Development Plan (NDP) 2030 in September 2012 by the
South African government, envisaged an economy that serves the needs of all South Africans. The NDP is
South Africa‟s socio-economic policy blueprint that focuses, among other things, on eliminating poverty by
reducing the proportion, of households with a monthly income below R419 per person from 39 percent to
zero and the reduction of inequality, increasing employment from 13 million in 2010 to 24 million by 2030,
broadening the country‟s ownership of assets by historically disadvantaged groups, ensuring that all
children have at least two years of pre-school education and that all children can read and write by Grade 3
providing affordable access to healthcare and ensuring effective public transport. The NDP offers a long-
term socio-economic development road map. In 2013, Government‟s National Development Plan (NDP)
and the New Growth Path (NGP) were applauded for their focus on creating jobs. The objectives of the
NDP are to eradicate poverty and sharply reduce inequality by 2030 while the NGP is an economic
framework for 2010-2020 with the overriding objective of creating employment. The 2030 structural reforms
outlined in the NDP are complemented by the near-term goals of the New Growth Path (NGP), the
Industrial Policy Action Plan (IPAP), and the projects of the Presidential Infrastructure Coordinating
Commission (PICC). The NDP provides a framework of policy and planning priorities and a phased
implementation approach to which the country‟s public and private business must be aligned to.
South Africa boasts the most modern and extensive infrastructure in Africa, with a highly developed
transport infrastructure consisting of an extensive road and rail networks. Transnet is a public company
wholly owned by the government and is dominant player in the Southern African transport sector,
supporting the country‟s freight logistics network. Its activities extend beyond the borders of South Africa
into Africa and the rest of the world. The company has five operating divisions that drive business value
creation, namely; Transnet Freight Rail (TFR), Transnet Engineering (TE), Transnet National Ports
Authority (TNPA), Transnet Port Terminals (TPT) and Transnet Pipelines (TP). Transnet has also three
specialist units: Transnet Property (TP), Transnet Capital Projects (TCP) and the Transnet Foundation
(TF). The Company‟s corporate centre is responsible for finance, planning and monitoring, human
resources, risk, commercial and corporate affairs.
Transnet announced its intention to spend R300 billion on capital projects, over a seven year period, which
would create 588 000 jobs. Transnet adopted the Market Demand Strategy (MDS) in 2012, the successful
execution of the MDS will result in an increase in rail, port and pipeline capacity ahead of market demand.
17
Through Transnet‟s Market Demand Strategy, rail volumes increased by 5 percent and capital invested in
the build programme increased by 30 percent to just below R30 billion, in 2013.
An amount of R20,7 billion was invested in the GFB and relates to the upgrade and maintenance of
infrastructure and rolling stock. Transnet transported 88,0mt of GFB volumes during the year. The New
Multi-Product Pipeline (NMPP) connecting Durban with Johannesburg will ensure the supply of liquid fuels
to the hinterland. The NMPP is a strategic investment to secure the supply of petroleum products to the
inland market over the long term. It is one of the largest and most complex multiproduct pipelines in the
world.
TFR is the largest division within Transnet, representing the group‟s rail freight transport interests. It
transports bulk and containerised freight by rail. The network and rail services provide strategic links
between ports and production hubs and connect with the railways of the SADC region. The Rail network
unit manages Freight Rail‟s infrastructure and focuses on the maintenance, modernisation and expansion
of the approximately 20 500 route kilometre (31 000 track km) rail network. About 1 500 km comprises
heavy–haul lines for coal and iron ore export. There are dedicated railway lines for iron ore from Sishen, in
the Northern Cape to Saldanha Bay on the west coast, and for transporting coal from the coal fields of
Mpumalanga to the Richards Bay Coal Terminal (RBCT) on the east coast.
Portnet, a subsidiary of PSA Corporation Limited, was formed in 2000 with the aim of helping the port and
shipping to increase productivity and save costs through the greater use of information technology and the
internet. Portnet is the largest port authority in Southern Africa, with the best-equipped and most efficient
network of ports in Africa. The network connects the ports of South Africa and the rail networks of the Sub-
Saharan region. Most of South Africa‟s minerals are exported through five major ports, the largest of which
is Richards Bay Coal Terminal (RBCT) with the capacity of 92 Mt per annum mainly for coal exports.
In 2013, the RBCT received and exported more than 70 MMt (77.2 MMst) of coal for the first time.
According to RBCT operating statistics, the terminal received 70.8 MMt (78 MMst) of coal and shipped 70.2
MMt (77.4 MMst) of coal in 2013. Nonetheless, the terminal operates below its nameplate capacity of 91
MMt per year. South Africa's coal exports are mostly sent to India, China, and Europe. The coal line is the
main export channel for transporting coal, and starts at the mines in Mpumalanga and ends at the Port of
Richards Bay. Plans are in place to increase rail capacity to 81,0mt in the near future and thereafter to
97,5mt. The total expansion and sustaining capital investment for the coal and mineral system programme
is estimated at R45,5 billion over the next seven-year period of the Market Demand Strategy (MDS). Final
designs to expand capacity to 81,0mt are nearing completion and a number of work packages are already
in execution. The land acquisition process is well underway for constructing substations on privately-owned
land. Negotiations are underway with Eskom to ensure that the upgrading of the electrical supply between
Ermelo and Richards Bay is completed according to schedule. The project is expected to be completed by
the 2018 financial year.
18
The iron ore line is the main export channel for iron ore from the mines in the Northern Cape to the Port of
Saldanha. Rail capacity was increased to 60,0mt and port capacity to 58,0mt over the quay wall. Phase 1A
to C to increase the iron ore line capacity to 60,0mt is complete. The prefeasibility study to expand the
capacity is in progress. The business case is currently undergoing a detailed validation process from a
commercial, technical and economic perspective. Phase 1D, being the addition of a third tippler and
associated rail works, has been approved by the Board for approximately R1,6 billion. The third tippler will
ensure that 60,0mt can be exported on a sustainable basis as the two existing tipplers currently do not
allow for any down-time.
The Port of Ngqura being developed near Port Elizabeth in the Eastern Cape will increase the country‟s
port capacity substantially. The port is capable of serving post-Panamax dry and liquid bulkers and the new
generation of cellular container ships. On 27 January 2012, the Minister of Transport gave effect to the
cabinet decision by issuing a section 79 Directive in terms of Ports Act, enabling Port Terminals to operate
the terminal until 26 January 2015.
Eskom was established in South Africa in 1923 as the Electricity Supply Commission. In July 2002, it was
converted into a public, limited liability company, wholly owned by government. Eskom is a vertically
integrated operation that generates, transmits and distributes electricity to industrial, mining, commercial,
agricultural, residential customers and redistributors. According to South Africa's Department of Energy
(DOE), Eskom supplies roughly 95 percent of South Africa's electricity and the remainder comes from
independent power producers (IPPs) and imports. Eskom buys and sells electricity with countries in the
region. South Africa plans to diversify its electricity generation mix. Currently, about 90 percent of South
Africa's generation capacity is from coal-fired power stations, about 5 percent from one nuclear power
plant, and 5 percent from hydroelectric plants, with a small amount from a wind station, according to South
Africa's DOE. South Africa's renewable energy industry is small, but the country plans to expand
renewable electricity capacity to 18,200 MW by 2030. South Africa has one nuclear power plant, Koeberg,
with installed capacity of 1,940 MW. The country plans to expand nuclear power generation by 9,600 MW
by 2030.Eskom is ranked among the top ten utilities in the world in terms of generation capacity.
Eskom is projected to spend over R200 billion for the supply of coal over a period of five years. The aim is
for the power utility to procure more than 50 percent of its coal from emerging black coal miners by 2018.
In May 2013, the Minister of Public Enterprises launched the Black Emerging Miners Strategy to increase
black participation and ownership in the coal-mining sector. A key element of the strategy is to establish a
mine development fund to provide finance for the development of mines, mainly at the early exploration
stage. The fund started operating at the end of 2013/14. Eskom finalised its build programme and that
about 82 percent of funding had been secured. In 2013, Eskom spent about R65 billion and will spend
another R337 billion over the next five years, to complete the Medupi, Ingula and Kusile power stations.
The SA‟s power utility aimed to have the first unit of Medupi start operation by the end of 2013. Evidence
from a survey commissioned by utility suggests that the public campaign to save energy is bearing fruit.
19
South Africa‟s banking system is well-developed, which sets it apart from many other emerging economies,
offering a mature market with a good regulatory and legal framework. The South African Reserve Bank
(SARB) oversees the local banking services industry. The non-banking financial services industry is
governed by the Financial Service Board (FSB). The South African banks are well capitalised and
managed; and have sophisticated risk-management systems and corporate-governance infrastructure
comparable to First World economies.
South Africa has a sizeable labour pool and a Human Development Index (HDI) survey, conducted by the
United Nations in about 187 countries, places South Africa at 118 as a medium human development
country. The Government, through the Amended Skills Development Act of 2003 tightened regulations to
ensure continuous improvement in the skill development strategies across all sectors. The Mining
Qualifications Authority (MQA) is responsible for the provision and administration of skills development
projects for the mining and minerals sector.
PRODUCTION OVERVIEW OF SELECTED MAJOR MINERALS
TABLE 5: SOUTH ARICA‟S PRODUCTION OF SELECTED MAJOR MINERALS, 2009 – 2013
COMMODITY UNIT PRODUCTION
2009 2010 2011 2012 2013
Coal t 250 538 125 257 205 807 250 706 255 258 575 793 255 019 489
Cobalt t 238 840 862 1 102 1 294
Copper t 92 884 83 640 89 298 69 859 80 821
Chromite t 7 560 938 10 871 095 11 865 380 11 310 223 13 652 883
Diamonds ct 6 112 834 8 870 967 7 117 887 7 245 403 8 143 256
Gold kg 197 628 188 702 180 293 154 178 159 472
PGMs kg 271 393 287 304 288 851 254 338 264 188
Nickel t 34 605 39 960 43 321 45 945 51 208
Lead t 49 149 50 625 54 460 52 489 41 848
Manganese t 4 575 766 7 171 745 8 651 842 8 943 415 11 055 658
Iron Ore t 55 313 053 58 709 330 58 056 897 67 100 474 71 533 814
Zinc t 28 159 36 142 36 629 37 034 30 145
Source: Department of Mineral Resources, Directorate: Mineral Economics
Table 2 above indicates increased production of most commodities despite the industrial action in the
mining industry, with the exception of lead, zinc and coal. During the period under review, manganese and
chrome production registered highest increase of 23 percent and 20 percent, respectively.
20
MINERAL EXPLORATION
Natural resources can play a crucial role in transforming economies if they are well managed. In 2013,
exploration expenditure allocations decreased in all the regions. The exploration expenditure declined by
approximately 30 percent to US$14.43 billion in 2013 from US$ 20.53 billion in 2012. The decrease was
due to weak commodity prices amid to poor economic global data from most economies such as Europe
and China. Consequently, investors are reluctant to invest in the mining industry, and this hinders junior
company‟s ability to raise fund for exploration. During the period under review, Canada recorded the
highest year on year percentage decrease of 41 percent from US$3 244.8 million in 2012 to US$1 917.6
million in 2013, followed by US at 38 percent. Canada was ranked the world second exploration region for
the past consecutive years, before dropping to the third and fourth place in 2012 and 2013 after being
surpassed by Africa and Rest of the world respectively. World exploration budgets for top ten countries
accounted for 66 percent or US$ 9.3 billion of the world total.
During the period under review, allocations for top ten rankings remained the same with Canada and
Australia remaining the top contributing countries to global exploration expenditure at 13 percent,
respectively. However, Russia moved up to number sixth in 2013 from the eighth position in 2012, and
Peru and China dropped to seventh and eighth, respectively. For the first time the Democratic Republic
Congo (DRC) was counted in the top ten countries contributing to global exploration expenditure,
occupying the tenth position replacing Argentina. Figure 2 below depicts other regions attracting large
exploration expenditure, which included Latin America at 26 percent, followed by Africa and Australia at 17
percent and 13 percent, respectively. Although South Africa lost its spot in the top ten countries, it is
counted among major African countries attracting large exploration spending, alongside Democratic
Republic of Congo (DRC), Burkina Faso, Ghana and Zambia. In addition, the country went from only
supplying simple tools to its miners to become an internationally competitive supplier to the world mining
industry.
FIGURE 9 EXPLORATION EXPENDITURE BY REGION, 2013
Source: Metal Economics Group, 2013
Pacific/Southeast Asia
7%
Latin America 26%
Canada 13% Rest of World 17%
Africa 17%
Australia 13%
United States 7%
21
In 2013, a total amount of 3 933 applications for prospecting and mining rights were received by the DMR.
Of the total number of applications received, 3 003 applications were for prospecting rights, 930 were for
mining rights. The country has the potential to supply a large share of the global demand for many
commodities, but its rich endowment of natural resources and high mineral potential can only be developed
and extended through a vibrant exploration sector.
The depleting nature of the mineral resources necessitates that South Africa refocuses its support towards
investment in greenfield exploration, in order to sustain the mining industry through the discovery of new
deposits. Mineral exploration investment as prescribed under the sustainable development element of the
Mining Sector Declaration, amongst other factors, was identified as one of the key elements in growing and
developing the mining industry.
ROLE OF MINING IN THE NATIONAL ECONOMY
South Africa‟s mining industry is one of the country‟s key economic sectors with potential for substantial
contribution to economic growth, job creation and transformation, consistent with the government‟s
objectives of higher and more balanced economic growth. In 2013, mining contributed R279.7 billion
($29.0 billion) or 9.2 percent to gross domestic product (Figure 3 and Table 3), an increase of R9.6 billion
over the previous year. The increase in value added in rand terms by mining increased despite the
sluggish prices of most commodities. This increase can be attributed to the rand/dollar exchange rate
which depreciated to R8.21 in 2013 from R9.65 in 2012 and the increase in the production of diamonds
and ferrous minerals. If the value-added contribution of processed minerals (presently included in the
manufacturing sector‟s figures) were added to that of mining and quarrying, the impact of mining on the
national accounts would be significantly higher. Mining and quarrying contribution to Gross Fixed Capital
Formation (GFCF) remained at 12.4 percent in 2013.
22
FIGURE 10: PERCENTAGE CONTRIBUTION OF MINING AND QUARRYING TO GROSS DOMESTIC
PRODUCT AND TOTAL FIXED CAPITAL FORMATION OF SOUTH AFRICA, 2004 – 2013 (CURRENT
RAND PRICES)
Source: South African Reserve Bank: Quarterly Bulletin, June 2014
TABLE 6: CONTRIBUTION OF MINING AND QUARRYING TO GROSS DOMESTIC PRODUCT, FIXED
CAPITAL FORMATION AND TOTAL NATIONAL EXPORTS OF GOODS, 2004 – 2013 (at current prices)
CONTRIBUTION TO VALUE ADDED
CONTRIBUTION TO FIXED
CAPITAL FORMATION
CONTRIBUTION TO NATIONAL
TOTAL EXPORT OF GOODS
National Gross
Total
Fixed
Year Domestic Product From Mining
Capital
Formation
From
Mining
Total
Exports From Mining
R‟million R‟million % R‟million R‟million % R‟million R‟million %
2004 1 415 237* 91 198* 6.4 226 180* 17 917* 7.9 310 525* 89 546* 28.8
2005 1 401 067* 105 992* 7.6 263 754* 16 743* 6.3 358 361* 102 486* 29.1
2006 1 572 319* 132 301* 8.4 324 083* 27 715* 8.6 447 690* 138 878* 31.8
2007 1 792 076* 156 970* 8.8 406 257* 40 206* 9.9 533 791* 161 755* 30.3
2008 2 033 207* 196 525* 9.7 520 717* 58 645* 11.3 704 293* 219 593* 30.8
2009 2 174 512* 196 521* 9.0 518 785* 64 140* 12.4 556 432* 176 390* 31.7
2010 2 423 362* 228 230* 9.4 512 305* 62 431* 12.2 656597* 224 956* 34.3
2011 2 635 033* 274 530* 10.4 550 362* 68 815* 12.5 789 764* 282 012* 35.7
2012 2 820 262* 270 096* 9.6 593 387* 74 658* 12.6 814 861* 269 119* 33.0
2013 3 030 263 279 691 9.2 654 427 79 602 12.2 917 602 279 543 30.5
Sources: Department of Mineral Resources, Directorate Mineral Economics
South African Reserve Bank, Quarterly Bulletin June 2014, pS106, 107 & 116
Notes * Revised figures
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Contribution to Gross Domestic Product
Contribution to Total Fixed Capital Formation
23
Despite the slowdown in the global economy, depressed commodity prices as well as labour unrest, South
Africa‟s mineral export sales revenue increased by 4 percent to R278.7 billion in 2013 from R269.1 in
2012. However, primary minerals export sales percentage contribution to the country‟s total exports value
of goods decreased from 33 to 30 (Figure 4 and Table 3). During the period under review, PGMs and
ferrous mineral export sales revenue increased by 23.7 percent and 23.3 percent, respectively. Nonferrous
minerals also followed the same trend registering an increase of 12 percent to R14.7 billion in 2013. The
increase in the export sales value was due to strong commodities demand from China, particularly of iron
ore, increased export volumes and well as the depreciation of the rand / dollar exchange rate. On the
other hand, the negative effect of the weaker commodity prices was evident in the gold and coal export
sales revenue which decreased by 25.1 percent and 2.6 percent from R72 billion in 2012 to R53.9 billion in
2013 and from R52.2 billion to R50.9, respectively.
FIGURE 11: CONTRIBUTION OF PRIMARY MINERALS TO SOUTH AFRICA‟S EXPORTS#, 2004-2013
Sources: Department of Mineral Resources, Directorate Mineral Economics
Notes: + Includes gold
#Total exports of goods only, including gold
The total state revenue from the mining sector decreased significantly by 47.6 percent to R18.9 billion in
2013 from R12.8 billion in 2012. Iron ore was the largest contributor at 33.3 percent to the total state
revenue, followed by platitum and chrome at 17.9 and 16.6 percent, respectively.
0
50
100
150
200
250
300
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
R'M
illio
n
Per
cen
tage
s
All Minerals PGM Gold nominal value of exports
24
TABLE 4: CONTRIBUTIONS OF MINING AND QUARRYING TO STATE REVENUE, 2004–2013
YEAR Ended
31 Mar
Mining Taxation
State Share of Profits
and Diamond Exports
Duties
Total Revenue
As Percentage
of Total State
Revenue
State Aid#
R‟ 000 R‟000 R‟000 % R‟000
2004 3 300 975 421 793 3 722 769 0,9 32 530
2005 8 754 436* 1 132 179* 9 886 615* 0,4 36 225
2006 19 296 292* 825 472* 20 121 764* 0,2 37 339
2007 25 055 690* 900 703* 25 956 393* 0,1 24 139
2008 38 540 477* 644 241* 39 184 718* 0,1 21 000
2009 15 625 306* 1 104 882* 16 730 188* 0,1 21 000
2010 16 921 875* 468 596* 17 390471* 0,1 18 000
2011 17 518 359* 802 061* 18 320 420* 0,1 18 000
2012 12 228 479* 575 234* 12 803 714* N/A N/A
2013 18 595 510 303 647 18 899 160 N/A N/A
Sources: Department of Finance, South African Revenue Service
Department of Mineral Resource, Directorate Financial Planning and Management Accounting
Notes: # In respect of leased mines
* Revised figures
In 2013, South Africa‟s labour market was characterized by disruptive labour unrest particularly in the
mining industry‟s PGMs sector. During the same year, mining industry, excluding exploration, research and
development organisations and head offices, employed 2.5 percent of South Africa‟s economically active
population, or 2.5 percent of all workers in the non-agricultural formal sectors of the economy (Table 5).
SA‟s total mining employment decreased by 14 533 workers or 2 percent to 510 099 in 2013 from 524 632
in 2012, mainly due to the retrenchments in the gold and PGMs sectors as a result of industrial action.
During the same period remuneration in the mining sector increased by 7.7 percent from R 93.61 billion in
2012 to R 100.81 billion in 2013 (Table 5). For the past decade, 2004-2013, a total of 61 190 direct jobs
were created, highlighting the significance of mining to the South African economy.
25
TABLE 5: EMPLOYMENT AND WAGES IN SOUTH AFRICA‟S MINING INDUSTRY, 2004–2013
EMPLOYMENT
WAGES
YEAR
Number
employed
As % of total
economically
active population
Total Per worker
per annum
As % of
total mining
revenue#
Nominal Real+ Nominal Real
+
R million R R
2004 448 909* 2,9 33 655 34 124 77 515* 80 146* 26,9
2005 444 132* 2,6 36 682 36 703 86 299* 90 305* 25,6
2006 456 337* 2,7 39 447 41 756 92 578* 99 149* 20,3
2007 495 150* 2,9 50 072 49 924 100 826* 100 527* 22,4
2008 518 519* 2,9 60 876 65 193 125 730* 134 647* 20,3
2009 492 219* 2,9 66 096 68 935 140 049* 146 064* 27,4
2010 498 906* 2,9 74 318 78 044 156 430* 164 273* 24,7
2011 512 878* 2,9 86 972 91 866 179 118* 189 196* 23,5
2012 524 632 2.9 93 608 107 930 205 725* 237 201* 25.7
2013 510 099 2.5 100 811 100 811 197 630 197 630 26.3
Sources: Quarterly Labour Force Survey (Stats SA), May 2014
Department of Mineral Resource, Directorate Mineral Economist
Notes: # Export plus local commodity sales
+ Deflated by means of the CPI with 2008 as base year
* Revised figures
In 2013, North West, platinum province remained the largest contributor to total mining employment and
remuneration at 34 percent and 32 percent respectively. This is despite the industrial action that took place
in the province. Provincial employment distribution was distinctly unequal with five provinces (North West,
Mpumalanga, Gauteng, Limpopo and the Free State) employing 89.3 percent of the mining workforce,
which in turn earned 88.9 percent of the total remuneration (Table 6).
TABLE 6: EMPLOYMENT AND REMUNERATION BY PROVINCE, 2013
PROVINCE
EMPLOYEES
TOTAL REMUNERATION
Number % R million %
North West
171 212
33,5
32 560
32,3
Mpumalanga 103 574 20,3 22 784 22,6
Gauteng 70 649 13,9 13 131 13,0
Limpopo 72 538 14,2 14 450 14,3
Free State 39 493 7,4 6 799 6,7
Northern Cape 37 711 7,4 8 093 8,0
KwaZulu-Natal 11 509 2,3 2 227 2,2
Western Cape 3 230 0,6 596 0,6
Eastern Cape 1 758 0,3 172 0,2
TOTAL 510 099 100,0 100 812 100,0
Source: Department of Mineral Resources, Directorate Mineral Economics
26
Figure 5 below indicates that the, 37 percent PGMs sector remained the largest contributor to SA‟s total
mining industry‟s employment, a decrease of 3 percent from 197 847 in 2012 to 191 261 in 2013. Other
sectors which recorded increase in employment were diamond and coal at 11 percent and 5 percent,
respectively. Employment levels in the gold mining sector decreased by 7 percent from 142 201 in 2012 to
131 591 in 2013. Nevertheless, the gold sector maintained its positions as the second largest contributor to
total mining employment at 26 percent.
FIGURE 12: MINING INDUSTRY‟S EMPLOYMENT BY SECTOR, 2013
Source: Department of Mineral Resources, Directorate Mineral Economics
South Africa‟s mining sector‟s remuneration increased by 8 percent from R93.6 billion in 2012 to R100.7
billion in 2013. The PGMs industry accounted for 37 percent of the total remuneration, followed by gold and
coal industry which accounted for 24 percent and 20 percent, respectively (Figure 6).
FIGURE 13: MINING INDUSTRY‟S REMUNERATION BY SECTOR, 2013
Source: Department of Mineral Resources, Directorate Mineral Economics
Diamonds 3%
Gold 26%
Coal 17%
PGM's 37%
Other Minerals 17%
Diamonds 3%
Gold 24%
Coal 20%
PGM's 37%
Other Minerals 16%
27
MINERAL PRODUCTION AND SALES IN 2013
The 2013 financial year was faced with challenges in terms of the slugglish global economic growth, SA‟s
labour unrest and lower industrial economic growth in China, which impacted negatively on most
commodity prices. Nevertheless, South Africa‟s total primary minerals sales value increased by 5.5 percent
from R384 billion in 2013 to R363.8 billion in 2012. Despite the decrease in price, coal still maintained its
position as SA‟s leading commodity revenue earner contributing 26 percent to the country‟s total minerals
sales revenue (figure 7). Coal total sales revenue increased by 6 percent from R96.1 billion in 2012 to
R101.4 billion in 2013. The increase in coal sales revenue can be attributed to strong local and
international demand for the commodity particularly from Asia. Ferrous and PGMs also registered increase
of 24 percent and 21.7 percent respectively. However, the 17.5 percent depreciation of the rand from
R8.2099 in 2012 to R9.6502 in 2013 could not offset the poor performance in the gold sales which
plummeted by 25.6 percent to R57.2 billion in 2013 from R76.8 billion in 2012.
FIGURE 14: CONTRIBUTION OF PRIMARY MINERAL COMMODITIES TO TOTAL SALES REVENUE,
2013
Source: Department of Mineral Resources, Directorate Mineral Economics
Gold 15%
PGMs 22%
Ferrous 23%
Non Ferrous 6%
Coal 26%
Indusrial 4%
Miscellaneous 4%
28
TABLE 7: MINERAL PRODUCTION AND SALES, 2013
COMMODITY
PRODUCTION
LOCAL SALES (FOR)
EXPORT SALES (FOB)
TOTAL SALES
Quantity Quantity Value (R) Quantity Value (R) Quantity Value (R)
1. Precious
Diamonds ct 8 143 256 ** ** ** ** ** **
Gold kg 159 472 7 524 3 312 817 676 123 389 53 845 892 651 130 913 57 158 710 327
Platinum-group
metals kg 264 188 ** 8 886 102 662 238 674 75 348 534 711 ** 84 234 637 373
Silver kg 68 633 6 002 43 178 660 61 725 410 157 561 67 727 453 336 221
2. Semi-precious stones * * * * * *
3. Ferrous@
t
96 242 355 * 13 159 592 811 70 001 335 76 162 082 868 * 89 321 675 679
4. Non-ferrous+@
t 207 689 92 017 8 123 442830 111 333 14 711 656 902 203 349 22 835 099 732
5. Energy
Coal t 256 282 183 374 050 49 569 211 280 73 583 828 51 813 484 136 256 957 878 101 382 695 416
Uranium oxide kg 626 279 ** ** ** ** ** **
6. Industrial@
12 135 109 213 1 930 275 452 14 065 384 665
7. Miscellaneous 10 040 390 216 4 806 739 699 14 847 129 915
TOTAL# 105 325 324 083 278 657 859 021 383 983 183 104
Source: Department of Mineral Resources, Directorate Mineral Economics
Notes: All quantities are in metric tons, unless otherwise specified
** Not available: where applicable, earnings are included under „Miscellaneous‟
@ Full details given in respective overview chapters
+ Excludes titanium and zirconium minerals which are included under Miscellaneous‟
* Nil
Total local mineral sales value increased by 11 percent from R94.6 billion in 2012 to R105.4 billion in 2013
(Table 7), due to the weakening of the rand/dollar exchange rate. In 2013, coal remained the major local
earner at R49.5 billion from R43.9 billion in 2012, representing an increase of 12.7 percent. All the ferrous
minerals performed well with manganese registering the highest increase of 38.3 percent, followed by iron
and chrome at 29.2 percent and 25.3 percent, respectively. PGMs local sales revenue also followed the
same trend increasing by 7.3 percent to R8.9 billion in 2013 from R8.3 billion in 2012. In 2013, gold sector
was hardest hit declining by 31.9 percent and losing all its gains of the past three years.
29
TABLE 8: SOUTH AFRICA‟S PRIMARY MINERAL SALES BY PROVINCE, 2013
PROVINCE
LOCAL SALES
(FOR)
EXPORT SALES
(FOB)
TOTAL SALES
Mpumalanga 42 874 633 40,7 63 507 107 22,7 106 381 740 27,6
North West 11 674 662 11,1 63 015 229 22,5 74 689 891 19,4
Northern Cape 10 702 930 10,2 64 236 525 23,0 74 939 455 19,5
Limpopo 19 145 103 18,2 38 477 232 13,8 57 622 335 14,7
Gauteng 5 748 241 5,5 30 421 051 10,9 36 169 292 9,4
Free State 4 377 253 4,2 12 214 165 4,4 16 591 417 4,3
KwaZulu-Natal 4 979 370 4,7 5 078 634 1,8 10 058 044 2,6
Western Cape#
5 238 704 5,0 2 580 824 0,9 7 819 528 2,0
Eastern Cape 658 131 0,6 11 876 0 670 008 0,2
TOTAL#
105 399 026
100,0
279 542 643
100,0
384 941 670
100,0
Source: Department of Mineral Resources, Directorate Mineral Economics
Note: # Hydrocarbons were produced and sold at a value of R1 070 million locally
The bulk of the total mineral revenues were generated from Mpumalanga, North West, Northern Cape,
Limpopo and Gauteng provinces collectively accounting for 90.6 percent of the total primary mineral sales
revenue (Table 8). Mpumalanga remained the leading contributor to both local and export sales revenue
with 40.7 percent and 22.7 percent respectively. In 2013, Northern Cape surpassed North West province to
be the second largest contributor to export and total sales revenue at 23.0 percent and 19.5 percent,
respectively. Mpumalanga is mainly dependent on coal as a major contributor towards minerals revenue,
North West depends on PGMs, Northern Cape on diamonds, Limpopo on PGMs, diamonds, copper as well
as coal and Gauteng on gold.
SELECTED PROCESSED MINERAL SALES
The prosessed total sales revenue increased by 12.2 percent from R59.5 billion in 2012 to R66.7 billion in
2013, with export and local sales increasing by 12.6 percent and 10.1 percent, respectively. (Table 9). The
largest contributors to the total of selected processed minerals sales were chromium alloys at 42.8 percent,
followed by a conglomerate of classified commodities at 39.1 percent and antimony at 22.4, respectively.
30
TABLE 9: SOUTH AFRICA‟S PRODUCTION, LOCAL AND EXPORT SALES OF SELECTED
PROCESSED MINERAL PRODUCTS, 2013
Sources: Department of Mineral Resources, Directorate Mineral Economics
: United State Geological Survey
Notes : + Contained vanadium
x Comprises aluminium, titanium slag, zinc metal, low-manganese pig iron, silicon alloys and
metal, phosphoric acid, and antimony trioxide
Table 10 below, shows KwaZulu-Natal (KZN) province as the major contributor to the total selected
processed mineral sales accounting for 38.2 percent, followed by Mpumalanga and North West provinces
at 31.7 percent and 19.7 percent respectively, (Table 10). Together, KwaZulu-Natal, Mpumalanga and
North West provinces accounted for 89.6 percent of the total processed minerals sales revenue. Titanium
slag and aluminium dominated the KwaZulu-Natal contribution, whilst 94.6 percent of Mpumalanga‟s total
sales revenue was derived chromium alloys. North West‟s total processed mineral sales revenue was
almost entirely derived from ferroalloys contributing about 28.5 percent. These three provinces also
dominated the local and export sales revenue, with a combined contribution of 91.3 percent and 89.3
percent, respectively.
COMMODITY PRODUCTION LOCAL SALES EXPORT SALES TOTAL SALES
Mass Value (FOR) Mass Value (FOB) Mass Value (FOB)
T T R‟000 T R‟000 T R‟000
Chromium alloys 3 219 162 503 994 2 983 321 3 489 887 25 552 642 3 993 881 28 535 964
Manganese alloys
787 249 82 319 737 127 577 111 4 927 945 659 430 5 665 073
Vanadium+
21 397 1 421 210 820 15 500 2 278 915 16 920 2 489 735
Other: Classifiedx
2 479 945 459 002 6 389 569 1 862 093 19 714 699 2 321 098 26 104 268
TOTAL 2013 6 507 753 903 372 10 715 989 5 256 135 56 001 719 6 159 507 66 717 708
TOTAL 2012 6 169 938 799 565 9 736 533 5 253 728 49 724 842 6 053 291 59 461 376
31
TABLE 10: SOUTH AFRICA‟S LOCAL AND EXPORT SALES OF SELECTED PROCESSED
MINERAL PRODUCTS BY PROVINCE, 2013
PROVINCE
LOCAL SALES
(FOR)
EXPORT SALES (FOB)
TOTAL SALES
R‟000 % R‟000 % R‟000 %
KwaZulu-Natal 5 561 687 51,9 19 926 516 35,6 25 488 203 38,2
Mpumalanga
3 387 327 31,6 17 735 520 31,7 21 122 847 31,7
North West
837 870 7,8 12 322 561 22,0 13 160432 19,7
Gauteng 638 345 6,0 2 862 577 5,1 3 500 921 5,2
Limpopo 228 804 2,1 820 255 1,5 1 049 059 1,6
Western Cape 61 956 0,6 2 334 288 4.2 2 396 244 3.6
TOTAL 9 736 533 100.0 49 724 842 100.0 59 461 376 100.0
Source: Department of Minerals Resources, Directorate Mineral Economics
SOUTH AFRICA’S IMPORTS OF SELECTED PRIMARY AND PROCESSED MINERAL PRODUCTS,
2013
As a result of its vast mineral resources, South Africa is, to a large degree self-sufficient with respect to the
supply of minerals. However, there are some minerals and mineral products, which need to be imported
due to lack of local resources. The total value of the more significant imports during 2012 decreased by
16.1 percent from R20.1 billion in 2011 to R16.8 billion in 2012 (Table 11). In order to reduce the increase
in imports, South Africa will need to intensify beneficiation and develop projects that will produce products
locally and substitute imported goods.
The value of imports of precious metals increased significantly by 80 percent to R 3.0 billion in 2012 from
R1.7 billion in 2011, with diamonds also increasing by 74.1 percent. During the same period coking coal
and primary industrial minerals sales value decreased by 40.4 percent and 18.6 percent respectively.
32
TABLE 11: SOUTH AFRICA‟S IMPORTS OF SELECTED PRIMARY AND PROCESSED MINERAL
PRODUCTS, 2013
PRODUCT VALUE (FOB)
2012
R‟000
2013
R‟000 Year on year % change
Precious
Diamonds 1 245 375 1 364 863 9.6
Other precious and semi-precious stones *
278 019 276 548 -0.5
Precious metals +
3 081 658 3 062 894 -0.6
Ferrous@
Primary 837 882 696 639 -16.9
Processed 1 028 490 1 380 038 34.2
Nonferrous@
104 301 145 512 39.5
Coking Coal 1 072 519 2 839 238 164.7
Industrial@
Primary 1 041 081 1 541 261 48
Processed 2 388 143 1 988 923 16.5
Manufactured 5 727 067 6 357 199 48.1
TOTAL# 20 106 337 16 873 550 -16.1
Source: South African Revenue Service, 2013
Notes: * Includes natural and synthetic precious or semi-precious stones and dust and powders of these stones
+ Includes alloys containing base metals
@
Full details given in relevant chapters
REPORTED MINERAL-RELATED PROJECTS IN SOUTH AFRICA
Newly committed investment in mineral related projects in South Africa amounted to R167 237 million by
September 2012, of which 87.9 percent is for primary minerals and 12.1 percent recorded for processed
mineral products (Table 12). Platinum projects dominated the primary minerals, accounting for 54.8
percent followed by other minerals 38.9 percent and gold‟s 5.4 percent.
33
TABLE 12: NEWLY COMMITTED MINERAL-RELATED PROJECTS IN SOUTH AFRICA, 2013
SECTOR COST
R million
COST+
$ million
AS A PERCENTAGE OF
PRIMARY MINERALS
AS A PERCENTAGE OF
TOTAL MINERAL PRODUCTS
Primary
Gold
Platinum
Other
Processed minerals
163 646
8 301
76 237
79 108
35 521
15 343
778
7 148
7 417
3 330
100
5.1
46.6
48.3
82.2
4.2
38.3
39.7
17.8
TOTAL
199 167
18 673
100.0
Source: Department of Minerals Resources, Directorate Mineral Economics
Mining Weekly
Note: +At a Rand/dollar exchange rate of R10, 6654, as at September 2014
SADC MINING AND MINERAL PRODUCTION OF SELECTED MAJOR MINERALS
The Southern African Development Community (SADC) countries continue to be major contributors to the
world‟s mining and mineral production. During the period 2012 to 2013, mineral production of SADC
countries decreased significantly, with platinum production registering the highest decreased of 80.3 percent
from 143 300kg in 2012 to 137 024kg in 2014, with diamond also decreasing by 45 percent (Table 13). The
decrease in the platinum production can be attributed to the decline in the metal price and the continuing
Eurozone economic crisis. However, chromite and copper registered increase of 48 percent and 9.9 percent,
respectively.
TABLE 13: SADC MINE PRODUCTION OF SELECTED MAJOR MINERALS, 2009 – 2013
MINERAL PRODUCTION
unit 2009 2010 2011 2012 2013
% of world
production
Coal t 255 863 000 260 448 000 256 755 000 258 575 793 256 282 136 -3.3 %
Cobalt t 27 738 56 840 58 540 9 764 6 494 -5.4 %
Copper t 1 046 900 1 254 400 1 371 500 1 525 800 1 823 600 9.9 %
Chromite t 10 742 600 11 340 000 11 411 400 11 549 900 14 126 300 48.0 %
Diamonds carats 57 807 117 69 574 658 67 551 925 71 782 664 58 655 986 -45.0 %
Gold kg 266 344 272 600 239 500 236 000 159 724 -8.1 %
Platinum kg 148 000 156 500 158 400 143 300 137 024 -80.3 %
Nickel t 80 530 71 700 68 900 71 600 110 200 4.4 %
Lead t 60 000 63 000 62 500 59 200 52 800 -0.9 %
Zinc t 233 000 241 000 238 200 230 400 223 700 -1.6 %
Source: Department of Minerals Resources, Directorate Mineral Economics
World Bureau of Metal Statistics
*RSA Figure (other SADC countries figures not available)
34
MINERAL BENEFICIATION
Beneficiation remains a key program me for the Department of Mineral Resources as it seeks to leverage
the country‟s comparative advantage in mineral resource endowment to create a competitive advantage for
domestic mineral beneficiating entities thus playing a contributory role towards setting the country‟s growth
trajectory on a production led growth path.
To this end, the Department has put in place the policy building blocks to ensure security of raw material
supply by strengthening the provisions of section 26 as was planned in the beneficiation strategy. The
strategy, which was adopted as policy by Government in 2011, had identified limited access to raw
materials as one of the five key constrains to domestic mineral beneficiation and proposed as an
intervention, strengthening of the Minerals and Petroleum Resources Development Act to ensure security
of supply for domestic beneficiation.
Section 26 of the Mineral and Petroleum Resources Amendment Bill of 2014, ensures security of supply
by:
Enabling the Minister, after consultation with stakeholders, to designate identified minerals as
being critical for domestic beneficiation.
Compelling producers of designated minerals to set aside a predetermined percentage of their
production for local beneficiation.
Ensuring designated minerals are accessed at competitive prices through a provision that requires
producers to sell the portion of designated minerals at mine gate price or an agreed price between
the producer and beneficiator.
Ensuring local demand for designated minerals is satisfied through section 26(3) which requires all
exports of designated minerals to have written approval except exports done by producers who
have complied with section 26.
Security of supply is but one element identified by the strategy required to increase levels of local
beneficiation. Implementation of all elements required to increase local beneficiation will be a collaborative
effort between all organs state.
The continued stagnation in most commodity prices off their pre-financial crisis highs and more recently the
retreat in the gold price have starkly shown the peril for countries of over reliance on raw mineral resource
exports. The adoption of the mineral beneficiation strategy for the South African mining and minerals
industry as policy was one in a series of deliberate interventions by government to shift the trajectory of the
economy to a more sustainable course. This intervention was followed by the development of an
implementation framework that pulls together policy building blocks suggested in the strategy and specifies
how they will be implemented to create a conducive environment for increased mineral beneficiation that
will be the cornerstone for the re-industrialisation drive by government.
35
ECONOMIC OUTLOOK FOR THE SOUTH AFRICAN MINERALS INDUSTRY 2012/2013
Five years after the global financial crisis, the world economy is showing signs of bouncing back, pulled
along by a recovery in high income economies. Developing country growth is also firming helped by
recovery in high income economies as well as moderating but still strong growth in China.
Although global activity strengthened during the second half of 2013 and Q3 2013 touted as turning point
for the global economy, the reality is that 2013 was a difficult year. The advanced economies‟ below trend
growth continued, despite several new policy initiatives to help reduce risks, stabilizer consumer, business
and investor confidence. However, it is anticipated that global GDP growth, adjusted for inflation will
rebound from 2.9 per cent in 2013 to around 3.3 per cent in 2014. Across the mature economies, GDP
growth in 2013 recorded a modest 1.3 per cent. The Eurozone is expected to return to positive growth rate
of at least 1.0 per cent in 2014, moderately picking up the pace from a weak recovery. The United States is
the second largest contributor, after China to somewhat stronger outlook for 2014.
Developing countries continue to register much stronger growth than developed economies. Since 2012,
most developing countries have been adopting more expansionary monetary and to a lesser extent, fiscal
policies to strengthen domestic demand. Potential growth in many developing countries is likely lower than
before the global financial crisis. China for example is expected to have shifted to a lower but more
sustainable and balanced growth trajectory. The least developed countries are projected to see faster
growth going into the next three years or so.
However, with commodity demand moderating and Official Development Assistance (ODA) falling, the
pace of expansion will still be notably slower than the pre-financial crisis period.
The employment situation remains a key policy challenge in a large number of economies, as the world
economy continues to expand well below its potential. Among developed countries, unemployment is most
severe in parts of the Euro area. In early 2013, the unemployment rate increased to 26.7 per cent in Spain
and 27.2 per cent in Greece, with youth unemployment rates exceeding 59 per cent. While the
unemployment rate in the USA has fallen, it is still high by historical standards.
In most developing regions, labour markets have not extensively suffered from weak demand as in
developed economies. In some emerging economies, unemployment rates have dropped below the levels
seen before the financial crisis, particularly in South America and East Asia. Unemployment continues to
be a key problem in many African countries despite relatively high growth rates over the past few years.
Labour market challenges, such as low participation rates, particularly among women, high youth
unemployment, large informal sectors, high shares of low quality jobs and slow productivity growth.
Gross Domestic Product (GDP) growth rates
Global GDP growth adjusted for inflation grew by 2.9 per cent in 2013, lower than the 3.5 per cent
projection by International Monetary Fund (IMF) and also below the 3.2 growth recorded in 2012. Across
36
the mature economies, the 2013 GDP growth was 1.3 per cent, moderately picking up the pace from a
weak recovery.
TABLE 14: OVERVIEW OF THE WORLD ECONOMIC OUTLOOK PROJECTIONS
Projections
2012 2013 2014 2015
Advanced Economies 1.4 1.3 2.2 2.3
United States 2.8 1.9 2.8 3.0
Germany 0.9 0.5 1.7 1.6
France 0.0 0.3 1.0 1.5
Italy -2.4 -1.9 0.6 1.1
Japan 1.4 1.5 1.4 1.0
United Kingdom 0.3 1.8 2.9 2.5
Emerging Market and Developing Economies 5.0 4.7 4.9 5.3
Russia 3.4 1.3 1.3 2.3
China 7.7 7.7 7.5 7.3
India 4.7 4.4 5.4 6.4
Brazil 1.0 2.3 1.8 2.7
Mexico 3.9 1.1 3.0 3.5
Sub-Saharan Africa 4.9 4.9 5.4 5.5
South Africa 2.5 1.9 2.3 2.7
Source: World Economic and Financial Surveys April 2014
Overall, the world‟s largest mature and emerging economies medium term outlook remains slightly more
positive than the long term as these economies still have a long way to go toward closing remaining output
gaps. The USA is expected to grow at 2.4 per cent on average per year and the Euro Zone at 1.2 per cent
from 2014 to 2019
Sub-Sahara Africa
Sub-Sahara Africa‟s started the year on a solid footing as one of the best placed regions to benefit from the
pick-up in global growth. Economic activity was robust in the region in 2013. GDP growth strengthens to
4.7 per cent, up from 3.7 per cent in 2012, supported by robust investment in the resource sectors and
public infrastructure. However domestic constraints and a tightening global environment may moderate
growth in the medium term. At the moment, the region‟s prospects remain favourable despite emerging
challenges, such as weaker commodity prices and tighter global financial conditions. During the period
1995 to 2013, the region performed strongly, with an average annual GDP growth of 4.5 per cent.
Foreign direct investment (FDI) continued to flow to the region, not only in the oil, gas and mining sectors
but also in non-extractive industries. According to Africa Overview., net FDI inflows were estimated at
US$43 billion in 2013, up from US$37 billion in 2012.
37
Across Africa in general, governments have stepped up investment spending. Public investment continues
to be geared toward the provision of basic infrastructure, such as power generation, roads and port
facilities, which have persistently continued to limit Africa‟s growth potential. Economic growth in Sub-
Sahara Africa is forecast to increase to 5.2 per cent, driven by increasing investment to exploit the region‟s
natural resources and develop infrastructure. A quick review of selected Sub-Sahara Africa countries
indicates that;
Democratic Republic of Congo, despite its significant domestic political uncertainties is making further
economic progress, with real growth of 6.0 per cent of GDP in 2013.
South Africa is the biggest and most advanced economy in Sub-Sahara Africa . It is also the biggest
global producer of gold, platinum and chrome.
Angola is Africa‟s second biggest oil producer. The economy is dominated by the government-owned oil
sector which is responsible for 97 per cent of exports.
Zambia, driven by high momentum in the mining industry has registered average annual economic growth
of 6.0 per cent in recent years.
Botswana has abundant diamond resources and the economic indicators are very favourable.
Mozambique, since 2006 the country‟s economic growth has ranged between 6 and 8 per cent drive by
several new projects.
The manufacturing sector in the region is likely to focus on the processing of minerals and agriculture
commodities. A growing share in value added will lower the countries‟ exposure to commodity price
volatility.
South Africa
The South African economy was impacted by the recession in Europe and uncertainties in other export
markets. In 2013, the GDP growth weakened to 1.9 per cent. However despite the country being the
poorest performer in GDP growth, it remains an economic hub for neighbouring countries, which
traditionally settle a significant portion of their exports and imports through South Africa‟s air and sea ports.
South Africa‟s economy continues to grow, but at a slower rate than previously expected. The 2013 GDP
growth was projected at 2.7 per cent, but only managed a meagre 1.9 per cent. Although the GDP grew at
an annualized rate of 3.8 per cent in the fourth quarter of 201, it failed to achieve a 2 per cent expansion
across 2013. Both the critical mining and manufacturing sectors grew at double digit rates in the fourth
quarter after a poor performance earlier in the year. However, this wasn‟t enough to push annual growth up
higher than expected. The economy grew by only 1.9 per cent in 201`3. Faster economic growth will
require greater private sector investment and improved trade performance
38
Planned strong capital investment by the public sector, additional electricity generating capacity, relatively
stable inflation, low interest rates and robust economic activity and supportive environment should see an
improved growth in the medium term. Moderate employment growth is also expected over the next 5 years
and the implementation of the National Development Plan (NDP) will strengthen growth and accelerate job
creation.
Expected economic activity in 2014:
The euro economy is expected to continue growing at a subdued pace on the backdrop of receded break
up risk and improved sentiment. In the USA, gradual acceleration of the economic activity is expected, as
the negative drag from the fiscal pinch dissipates over time and consumer pick up spending. Economic
activity in emerging markets is expected to accelerate modestly due to higher demand in advanced
economies.
39
TABLE 15: MINERAL/METAL PRICES
COMMODITY UNIT 2009 2010 2011 2012 2013
Ave Ave Ave Ave Ave
Aluminium High Grade, LME Cash $/t 1664.36 2173.19 2383.199 2023.519 1849.255
Antimony, Metal Bulletin Free Market $/t 5200.86 9020.271 14741.44 12778.05 10347.67
Cadmium, Metal Bulletin Free Market $/lb, 149.25 193.5038 139.3483 90.58388 96.05665
Coal+ - Steam: Local FOR R/t 162.75 177.7 196.1383 222.1713 260.4268
Export FOB R/t 515.583 549.9 727.8467 684.9079 689.7281
Anthracite: Local FOR R/t 690.333 776.4 898.9033 953.7545 932.384
Export FOB R/t 889.75 770.4 864.6483 945.4677 867.1103
Cobalt, Metal Bulletin Free Market $/lb, 17.3538 20.56907 17.58091 13.9735 13.16572
Copper: Grade A, LME Cash $/t 5112.77 7533.923 8832.891 7957.306 7335.838
Republic Copper Price R/t #DIV/0! 62068.2 72610.5 73057.35 79868.94
Ferrochrome: Charge 52% Cr* $/lb, Cr 0.9147 1.244329 1.255952 1.211358 1.161625
Ferromanganese: High Carbon 7,5% C* €/t 912.737 1091.516 993.1415 907.583 775.5233
Ferrovanadium 70-80% V* $/kg V 25.0127 29.99399 28.76459 24.98929 27.66005
Gold, London Price $/ozt 973.322 1225.05 1569.073 1669.585 1410.907
Ilmenite Concentrate 54% TiO2 A$/t 86.0511 74.3125 128.3836 276.9318 291.3768
Lead, LME Cash $/t 1718.86 2144.443 2397.525 2064.249 2141.138
Lithium Ore: Petalite 4% $/t 212.495 212.5 212.5 212.5 212.5
Manganese Ore: 48-50% Metalurgical* $/mtu 5.3714 7.705549 6.066667 4.920332 5.420675
Molybdenum: Molybdic Oxide*
$/lb.
Mo 11.3798 15.84478 15.7779 12.79116 10.40314
Nickel, LME Cash $/t 14633.2 21803.81 22938.74 17577.39 15018.27
Palladium, London Price $/ozt 263.483 526.3185 731.0204 646.719 724.9925
Platinum, London Price $/ozt 1204.85 1610.887 1718.628 1554.329 1487.022
Rhodium, Johnson Matthey Base Price $/ozt 1586.51 2458.431 2025.037 1275.73 1065.071
Rutile Concentrate 95% TiO2 A$/t 741.761 756.6761 1032.341 2369.85 1681.935
Silver, London Price $/ozt 14.6575 20.15743 35.33946 31.23604 23.75676
Tantalum Ore: 30% Ta2O5 $/lb, 35 0 0 0 0
Tin, LME Cash $/t 13563.8 20405.83 26181.78 21060.8 22370
Uranium Oxide, NUEXCO spot $/lb, 46.6802 45.87332 56.29857 48.96251 27.03937
Vanadium Pentoxide* $/lb, 6.03666 6.915378 6.606957 5.590256 5.996969
Zinc, Special High Grade $/t 1653.77 2160.709 2194.365 1952.983 1912.334
Zircon: Foundry Grade, Bulk, FOB A$/t 854.683 839.3523 1671.194 2489.683 1514.583
Exchange Rate R/$ 8.4371 7.3221 7.2531 8.2099 9.692267
40
In the years 2012 and 2013, commodity prices were affected by a number of macroeconomic factors, such
as cyclical momentum in China‟s economy which contributed to large swings and the “on-again off-again
concerns about financial fragility in the Euro Zone, which contributed to price volatility. Most commodity
prices slipped in 2013, prompted largely by slowdown in Chinese industrial production Annual average
prices of most commodities finished 2013 below levels of 2012.
Spot gold price averaged US$1 410.9/ozt in 2013, down from an average price of US$1 669.6/ozt recorded
in 2012. The price of gold rose every year from 2001 as investors looked for an alternative to the U.S dollar
and protection against inflation. At the 2013 price, gold lost 15 per cent when compared with 2012 price.
Violent strikes and supply disruptions in South Africa put platinum in the headlines in 2012 and 2013 and
the metal spent 2012 selling at a discount to gold. Despite the increased uncertainty as a result of
production disruptions in South Africa, prices were not driven up sharply. The price of platinum averaged
US$1 487.02/ozt in 2013. A drop of 4.3 per cent from the average price of US$1 554.3/ozt recorded in
2012. Despite strong Chinese and Indian imports, the 2012 and 2013 steam coal prices averaged 23 per
cent lower than in 2011. A strong recovery in Australian exports kept coal under pressure.
The copper price fell from an annual average price of US$7957.3/ton in 2012 to US$7335.8/ton in 2013 as
mine production increased. Global copper mine supply grew by just over 6.0 per cent in 2013, led by Latin
America and Africa. Despite strong growth in mine supply, which pushed the concentrate market into
surplus, several factors combined to maintain a tighter cathode market, such as growth in global demand,
relatively low scrap generation and some bottlenecks at smelting stage. As a result, copper LME stocks
have been declining since July 2013.
Aluminium price also fell from an average of US$2 023.5/ton in 2012 to US$1849.3/ton in 2013. The
recovery in developed markets should be supportive of global commodity demand in 2014 and beyond. For
some commodities, increased demand will be required to balance the additional capacity from new
operations. Looking ahead, there will be favourable long-term commodity demand, as we see an increase
in complexity of future mining projects. Chinese growth albeit, slow at present, is coming from a stronger
base which could see China‟s crude steel consumption peak at around 1 billion tonnes towards 2030.
Prosperity in other developing economies remain on an upward path, which should bring new demand for
various mineral commodities.
41
PART TWO: REVIEW OF SELECTED COMMODITIES
PRECIOUS METALS AND MINERALS OVERVIEW
L Malebo
PRODUCTION AND SALES
The precious metals and minerals industry includes gold, platinum-group metals (PGMs), silver, and
diamonds. South Africa was the world‟s largest producer of PGMs and the sixth largest producer of gold,
in 2013. The country‟s precious metals and minerals production excluding diamonds, increased by 3.5
percent to 492.5t as the industry recovered from the labour unrests particularly in the PGMs sector, which
saw PGMs and gold production improving by 3.9 percent and 3.5 percent, respectively, (Table 16). The
sector‟s total sales mass amounted to 464.9 t, a 6.2 percent drop compared with 2012. The decline in the
total sales was mainly as a result of a 25.7 percent drop in the gold total sales mass due to weaker local
demand for fabrication, jewellery manufacturing and specialised uses. Despite a 15 percent increase in the
global gold demand, South Africa‟s exports dropped by 25.2 percent partly due to a policy shift in India that
banned imports of gold coins into the country since May 2013.
South Africa retained its ranking as the eighth largest producer of diamonds by volume, with an output of
8.1 Mct, an increase of 12.4 percent compared with 2012. The country produced R2 billion worth of rough
diamonds in 2013, positioning the country as the fifth largest producer by value.
The precious metals and minerals‟ total revenue including diamonds contributed 40.2 percent to the
country‟s total minerals sales revenue, positioning the sector as the leading revenue earner in 2013. The
sector‟s total revenue declined by 1.6 percent in 2013 compared with 2012, due to weaker gold and silver
prices.
42
TABLE 16: SOUTH AFRICA'S PRODUCTION AND SALES OF PRECIOUS METALS, 2013.
COMMODITY YEAR PRODUCTION LOCAL SALES EXPORT SALES TOTAL SALES
t t R million t R million t R million
GOLD 2013 159.7 7.5 3 313 123.3 53 845 130.8 57 158
2012 154.1 11.2 4 863 164.9 71 962 176.2 76 824
PGMs 2013 264.2
27.8 8 886 238.7 75 348 266.5 84 234
2012 254.3 30.4 8 285 210.9 60 924 241.2 69 209
SILVER 2013 68.8 6.0 43.2 61.6 410 67.6 453
2012 67.3 6.1 49.6 70.2 533 76.3 583
DIAMONDS
(Mct)
2013 8.16 3.42 7 544 3.77 4 792 7.19 12 335
2012 7.25 2.69 5 199 4.45 4 780 7.15 9 979
PRECIOUS
METAL’S
TOTAL
2013 *492.7 *41.3 19 786 *423.6 134 395 *464.9 154 180
2012 *475.7 *47.7 18 397 *446.1 138 199 *493.7 156 595
Source: DMR, Directorate Mineral Economics
*Gold, PGMs and silver totals only
EMPLOYMENT
The precious metals and minerals sector employed 337 189 employees, a 4.3 percent drop compared with
2012, (Table 17). The gold and PGMs sectors‟ employment dropped by 7.5 percent and 2.9 percent,
respectively, while the diamond sector increased by 11.3 percent. Despite a drop in the number of
employees, the precious metals and minerals sector remained the leading employer, accounting for 66
percent of total mining employment in 2013.
TABLE 17: EMPLOYMENT AND REMUNERATION IN SOUTH AFRICA'S PRECIOUS METALS AND
MINERALS MINES, 2009 - 2013.
YEAR AVERAGE NUMBER
OF EMPLOYEES
TOTAL REMUNERATION
(R'000 000)
AVERAGE
REMUNERATION
R/employee
2009 356 197 44 064 123 707
2010 350 181 48 366 138 117
2011 352 570 53 614 152 066
2012 352 224 59 052 167 655
2013 337 189 63 523 188 390
Source: DMR, Directorate Mineral Economics
43
OUTLOOK
According to Gold survey 2014, total world gold demand is expected to increase in 2014, owing to major
increases in jewellery demand, coin and bar purchases. Gold market is expected to be closer to
fundamental balance compared with 2013, as global gold demand is forecast to outperform new gold plus
scrap supply in 2014. The metal‟s price is expected to remain flat for the remainder of 2014 into early 2015
due to the possible strengthening in the US dollar, weak global inflationary pressures, over supply of gold
and further possible Exchange Traded Fund (ETF) liquidation. However, the price could be supported by
continued strong demand from China and a relaxation in India‟s import duties.
Global supplies of PGMs are expected to decrease substantially in 2014 as a result of supply constraints
from South Africa after a prolonged strike in the first half of the year. The prospect of disruption to supplies
from strikes and industrial unrest combined with potential growth in photovoltaics and autocatalyst demand
are cited as factors which could support the metal‟s price for the remainder of the year and into early 2015.
Palladium prices are also expected to benefit from an anticipated market deficit, particularly given limited
mine supply and waning exports from Russian state stocks. Coupled with anticipated strengthening from
sales to the automotive gasoline sector, the metal‟s price is expected to average $774.81 in 2014, around
$50 above its average price in 2013. Demand for rhodium in autocatalysis is expected to increase as
global production of light duty vehicles continues to expand, leaving the market in deficit and price inflated.
REFERENCES
1. DMR, Directorate Mineral Economics.
2. GFMS Platinum and Palladium Survey, 2014.
3. GFMS Gold Survey, 2014.
4. Kimberley Process Certification Scheme Statistics.
44
DIAMONDS
Donald O. Moumakwa
SUPPLY-DEMAND
World rough diamond output rose by 2.0 percent to 130.5 Mct in 2013 (Table 18), valued at just over R14
billion. The Russian Federation remained the top producer by volume, accounting for 29 percent of total
output, while Botswana remained the top producer by value.
TABLE 18: WORLD ROUGH DIAMOND PRODUCTION, 2013.
MASS VALUE
Mct % US$ mil % $/ct
Angola 9.3 7.1 1 278 9.1 136.49
Australia 11.7 9.0 381 2.7 32.50
Botswana 23.2 17.8 3 625 25.7 156.36
Canada 10.6 8.1 1 906 13.5 180.52
DR of Congo 15.7 12.0 139 1.0 8.84
Namibia 1.7 1.3 1 360 9.7 805.24
Russian Federation 37.9 29.0 3 114 22.1 82.21
Sierra Leone 0.6 0.5 184 1.3 302.95
South Africa* 8.1 6.2 1 185 8.4 145.54
Zimbabwe 10.4 8.0 538 3.8 51.72
Other 0.9 0.7 131 0.9 145.37
Total: 2013 130.5 100.0 14 085 100.0 107.95
2012 127.9 12 645 98.81
Source: KPCS Statistics
* DMR,
Directorate Mineral Economics
South Africa (SA) retained its ranking as the 8th largest producer by volume, with an output of 8.1 Mct, an
increase of 12.4 percent compared with 2012 (Table 19). This was despite production disruptions in the
first half of 2013 at the country‟s largest diamond operation, De Beers‟ Venetia mine, owing to heavy rains
and subsequent floods. The country remained the 5th largest producer by value, after producing just under
R2 billion worth of rough diamonds. Kimberlites were the source of 96 percent of the country‟s production,
while alluvial and marine diamonds made up the remaining 4 percent. Combined production from De Beers
and Petra Diamonds operations accounted for 95 percent of total production and, despite dominating the
marine sector, Trans-Hex and Alexkor contributed less than one percent each. Local sales mass increased
by 26.3 percent to 3.4 Mct in line with increased production, while export mass declined by 15.5 percent.
45
TABLE 19: SOUTH AFRICA‟S ROUGH DIAMOND PRODUCTION AND SALES, 2013.
Production Local sales Export sales Total Sales
Kimberlites Mass (cts) Mass (cts) Value (R mil) Mass (cts) Value (R mil) Mass (cts) Value (R mil)
2013 7 877 176 3 170 091 5 500 3 698 146 4 158 6 868 237 9 658
2012 7 062 701 2 498 172 3 531 4 379 237 4 159 6 877 409 7 690
% Change 11.5 26.9 55.8 -15.6 0.0 -0.1 25.6
Alluvial
2013 234 114 212 940 1 788 51 044 517 263 984 2 305
2012 158 479 174 936 1 532 66 414 574 241 350 2 106
% Change 47.7 21.7 16.7 -23.1 -9.9 9.4 9.4
Marine
2013 31 966 26 186 141 13 356 113 39 542 254
2012 24 222 25 332 136 5 088 47 30 420 183
% Change 32.0 3.4 3.7 162.5 140.4 30.0 38.8
Total
2013 8 143 256 3 409 217 7 429 3 762 546 4 788 7 171 763 12 217
2012 7 245 402 2 698 440 5 199 4 450 739 4 780 7 149 179 9 979
% Change 12.4 26.3 42.9 -15.5 0.2 0.3 22.4
Source: DMR, Directorate Mineral Economics
The State Diamond Trader (SDT) and Petra Diamonds are mainly responsible for the majority of local
rough sales, while De Beers is mainly responsible for exports. The SDT is mandated by the Diamonds
Second Amendment Act no. 30 of 2005 to purchase up to 10 percent of run-of-mine (ROM) production
from all SA producers for sale to local cutting and polishing industry. In addition to the 10 percent due to
SDT, Petra sells all rough diamond production by open tender, with SA production being sold in
Johannesburg.
De Beers‟s Global Sight holder Sales (GSS) is the primary rough diamond distribution arm of the company
and the world‟s largest supplier of rough diamonds by value. The GSS sees De Beers‟s SA rough stones
being mixed with production from other countries and sold at a 5-day long sales activity, known as a sight,
to the company‟s clients, known as sight holders. The GSS was relocated from London to Gaborone in
2013, with the first sight taking place in November 2013.
Just over 40 percent by volume of SA‟s rough production was sold locally to the cutting and polishing
industry, while 45 percent was distributed to India, Israel and Belgium, the three main diamond
manufacturing and trading centres, as well as locations for De Beers‟s sightholders‟ downstream partners.
The US and China remained the major export markets for polished diamonds from both Israel and
Belgium, while the United Arab Emirates (UAE) emerged as the top export destination of polished stones
from India.
46
PRICES AND REVENUE
The International Diamond and Jewellery Exchange (IDEX) online global polished diamond price index
(PPI) indicates that average global polished diamond prices declined by 2.9 percent from 137.0 in 2012 to
132.9 in 2013. A standout feature is that prices peaked in March on the back of Hong Kong jewellery
show, and were nearly flat throughout the second half of 2013. This put a downward pressure on rough
prices which, coupled with uncertain economic conditions, eroded profitability and decreased rough
diamond financing by banks. However, SA local sales revenue increased by 42.9 percent, while the
exports value remained flat despite a 15.5 percent decline in volumes, perhaps a result of more better
quality stones being available for purchase.
FIGURE 8: THE IDEX ONLINE MONTHLY AVERAGE POLISHED DIAMOND PRICE INDEX, 2013.
Note: PPI is a percentage number that shows the extent to which a price has changed over a period as compared with the price in a
certain year, in this case April 2004-March 2005, taken as a standard year.
Source: IDEX Online.
KEY DEVELOPMENTS
The SA diamond industry has never really recovered from the 2008 economic slump, as evident from the
Department of Mineral Resources‟ production and sales figures. The downturn has presented a number of
challenges that will ultimately determine whether the country retains or increases its share of the global
diamond market in future. While there is clearly work to be done to increase the country‟s beneficiation and
job creation opportunities, local producers remain positive about prospects for increased diamond
production in the country.
The Minister of Mineral Resources hosted the jewellery summit in October 2013, which brought together
mining and jewellery manufacturing associations, with the view to creating entrepreneurs with the requisite
skills to enable South Africa to become a jewellery hub. Jewellery manufacturing is one of the five value
130.0
131.0
132.0
133.0
134.0
135.0
136.0
PP
I
47
chains identified in the beneficiation strategy approved by Cabinet in 2011. Thus, the summit is expected
to stimulate jewellery manufacturing, of which diamonds are a significant part, and ultimately contribute
positively to socio-economic development.
In October 2013, De Beers began construction of a new underground mine beneath its open pit Venetia
mine in the Limpopo Province. The $2 billion investment will extend the life of Venetia beyond 2040 and
replace the open pit as South Africa‟s largest diamond mine. With underground production expected to
commence in 2021, the mine is expected to treat approximately 130 million tonnes (Mt) of ore, containing
an estimated 96 Mct of rough diamonds. The mine will also create over 5 000 new jobs directly, and a
further 5 000 through the supply chain, benefitting the South African economy.
Petra is currently implementing a development plan at Finsch mine to increase production from
approximately 1.4 Mct to 1.8 Mct per annum by financial year (FY) 2016 and to 2 Mct by FY 2019, involving
both underground and tailings production. The company is also implementing an expansion plan at
Cullinan, which would increase production from the current 870 000 cts to 2.2 Mct by FY 2019. After failing
to find a suitable buyer, Petra downscaled two of its low tonnage, high grade fissure operations, Sedibeng
and Star diamonds.
Rockwell Diamonds completed a feasibility study to re-open Wouterspan mine, in a bid to become a mid-
tier diamond producer. The project, in the Middle Orange River region of Northern Cape, would cost $41
million and would create about 300 new jobs. In addition, Rockwell also started developing the
Niewejaarskraal mine and the Saxendrift Hill Complex. The latter led to the creation of 85 new jobs and
the company‟s future growth plans include options to further increase the production capacity at
Niewejaarskraal, which is expected to have employment benefits in the region.
EMPLOYMENT
An average of 13 547 people were employed in the diamond industry in 2013 (Table 20), representing an
increase of 11.2 percent year on year. This was largely attributed to an increase in the number of
construction workers as some producers embarked on expansion projects. Total remuneration continued
its upward trend, increasing by 19.3 percent to just over R2.8 billion and raising the average remuneration
per employee by 7.3 percent to R211 836 per annum.
48
TABLE 20: EMPLOYMENT (INCLUDING CONTRACTORS) AND REMUNERATION IN SOUTH AFRICA'S
DIAMOND MINING INDUSTRY, 2009-2013.
YEAR AVERAGE NUMBER
OF EMPLOYEES
TOTAL REMUNERATION
(R'000)
AVERAGE
REMUNERATION
(R/employee)
2009 12 109 1 809 550 149 438
2010 11 159 1 912 019 171 343
2011 12 030 2 142 965 178 135
2012 12 176 2 404 916 197 512
2013 13 547 2 869 744 211 836
Source: DMR, Directorate Mineral Economics
OUTLOOK
Global rough diamond production is expected to remain flat at best in 2014, as many of the world‟s major
mines are struggling to maintain previous high levels of output. SA production is expected to increase
slightly in 2014 and beyond, on the back of the relatively dry season experienced by Venetia mine, and
continuing production ramp-ups at different mines, most notably Finsch and Cullinan. Because of inherent
production constraints, supply is expected to struggle to keep pace with demand, which continues to rise in
both established markets, such as the US and Japan, and new markets, most notably China and India. As
a result, local and exports sales are also expected to increase. The mid- to long-term outlook for diamond
prices remains bullish as demand continues to outpace supply.
REFERENCES
1. DMR, Directorate: Mineral Economics.
2. Kimberley Process Certification Scheme Statistics.
3. IDEX Online.
4. State Diamond Trader Annual Report 2013/14.
5. www.debeersgroup.com.
6. www.petradiamonds.com
7. www.rockwelldiamonds.com
8. Miningmx, 16 May 2013.
49
GOLD
P J Perold
SUPPLY-DEMAND
Total world gold supply, which includes mine production and scrap supply, decreased by 4.8 percent from
4 452.0 t in 2012 to 4 239.4 t in 2013. This was mainly due to a decrease in global scrap supply (old gold
scrap), which accounted for 30.2 percent (1 280 t) of total supply, representing a decrease of 21.7 percent
compared with 2012. In addition, net hedging supply decreased by 1.1 percent from the previous year (Fig.
1). Mine production, at 3 007.4 t accounted for 70.9 percent of total supply and increased by 5.2 percent,
due to regional supply gains in excess of 20 t in China, Canada and the Dominican Republic. China
remained the largest producer, contributing 15.6 percent to world production, followed by Australia and
Russia, at 9.4 percent and 8.8 percent, respectively (Fig. 2).
FIGURE 9: GLOBAL GOLD SUPPLY, 2013.
Source: Klapwijk, et al, 2013, pp 8 – 9
* Net hedging supply: Balancing figure
South Africa‟s (SA) gold production increased by 3.5 percent from 154.2 t in 2012 to 159.5 t in 2013,
contributing 5.6 percent to global production, retaining its position in world ranking as the sixth largest
producer (Fig. 2). The increase in production was mainly due to higher mill grades, a general stabilisation
and a ramp-up of production. In addition, increased output resulting from Sibanye Gold‟s acquisition of
Gold One‟s Cooke Shafts, supported production increases to a large extent.
70.9 %
30.2 %
101.1 %
-1.1 %
Mine production Old gold scrap
Total mine production & scrap Net hedging supply*4 239.4 t
50
FIGURE 10: SOUTH AFRICA‟S CONTRIBUTION TO GLOBAL PRODUCTION, 2013.
Sources: USGS, 2014, pp 66-67, Klapwijk, et al, 2014, pp 40 - 41
*DMR, Directorate Mineral Economics, 2013-2014
South Africa produced gold bullion mainly from 30 primary gold mines in 2013, which contributed 95.4
percent to total production. In addition, the metal was recovered as a by-product from 34 Platinum Group
Metals (PGMs) operations; an offshore refinery, 5 recovery operations, 1 uranium plant and 1 antimony
mine, all of which contributed the remaining 4.6 percent to total production. Primary gold production
increased marginally from 147.9 t in 2012 to 152.2 t in 2013. In addition, gold produced from PGMs
operations increased by 15.9 percent to 7.3 t, in line with an increase in PGMs production in 2013.
Gauteng was the largest gold producer, at 82.3 t accounting for 51.6 percent of total production, followed
by Free State and North West Provinces at 21.6 percent and 20.6 percent, respectively (Fig. 3).
FIGURE 11: SOUTH AFRICA‟S PRIMARY GOLD PRODUCTION AND CONTRIBUTION TO TOTAL
PRODUCTION BY PROVINCE, 2013.
Source: DMR, Directorate Mineral Economics-2012, 2013
9.4 %
15.4 % 4.7 %
3.8 %
6.4 %
8.8 %
5.6 %
8.1 %
43.8 %
Australia China Canada Ghana Peru Russia South Africa# Chile Other
1.6 % 4.6 %
21.6 %
20.6 %
51.6 %
Limpopo Mpumalanga Free State North West Gauteng
51
In terms of production by goldfield, the West Wits Line yielded the largest gold production, accounting for
36.9 percent of total production, followed by Free State and West Rand at 21.6 percent and 14.8 percent,
respectively (Fig. 4). The remaining goldfields, inclusive of by-product from recovery plants and production,
contributed the remaining 26.7 percent to total production.
FIGURE 12: SOUTH AFRICA‟S PRIMARY GOLD PRODUCTION AND CONTRIBUTION TO TOTAL
PRODUCTION BY GOLD FIELD, 2013.
Source: DMR, Directorate Mineral Economics: 2012-2013.
Note: ° Gold mines outside the Witwatersrand Basin
* Platinum and base metal mines
Despite a 3.5 percent production increase, local sales volumes decreased by 33.5 percent to 7.5 t, in 2013
due to low uptake and weaker demand for fabrication, jewellery manufacturing and specialised uses, such
as dentistry and electronics (Table 21). Export sales mass decreased by 25.2 percent from 164.9 t in 2012
to 123.4 t in 2013, partly due to a 10.0 percent import duty on Indian bullion demand.
TABLE 21: SOUTH AFRICA‟S PRODUCTION AND SALES OF GOLD, 2004-2013
Year Production
Local sales Export sales Total Sales
Mass Value
Mass
Value
Mass
Value
R‟000 R' 000 R‟000
2004 337.2 3.9 347 093 343.1 28 982 777 347 29 329 871
2005 294.7 4.6 419 622 265.4 24 181 619 270.1 24 601 241
2006 272.1 5.7 720 790 277.4 36 722 302 283.1 37 443 092
2007 252.6 13.2 2 081 731 229.3 35 953 993 242.6 38 035 724
2008 212.6 8.8 1 997 761 190 43 994 483 198.8 45 992 244
2009 197.6 6.6 1 701 334 180.6 46 994 169 187.2 48 695 503
2010 188.7 7.2 2 055 698 176.9 51 037 449 184.1 53 093 147
2011 180.3 10.2 3 633 111 175.5 65 258 302 185.7 68 891 413
2012 154.2 11.3 4 862 748 164.9 71 961 757 176.2 76 824 504
2013 159.5 7.5 3 312 964 123.4 53 877 728 130.9 57 190 693
Source: DMR Statistics: 2012-2013
1.8 % 2.9 % 3.4 % 2.3 %
8.8 %
7.5 %
14.8 %
21.6 %
36.9 %
Evander Central Rand Other ° East Rand West Rand
By-product * Klerksdorp Free State West Wits Line
52
Total world gold demand increased by 15.0 percent from 4 314 t in 2012 to 4 957 t in 2013, mainly as a
result of a 16.0 percent growth in jewellery demand to 2 361 t and partly owing to a 33 percent increase in
physical bar investment to 1 377 t. Jewellery demand and retail investment contributed 47.6 percent and
35.9 percent to total demand, while net official sector purchases and industrial fabrication contributed 8.3
percent and 8.2 percent, respectively (Fig. 5). Net official sector purchases were strengthened as a result
of gold acquisitions by the Common Wealth of Independent States (CIS), acquiring 77 t in 2013.
Aggressive selling in the futures market combined with 12 consecutive months of selling, pushed combined
gold holdings down by 415.0 percent to 880 t in 2013, the first outflows of Exchange Traded Funds (ETF‟s)
since October 2009. Local backed ETF‟s, such as debentures by NewGold are fully backed by gold bullion
with each debenture equivalent to 1/100th of a fine troy ounce of gold bullion. It is held with a secure
depository on behalf of investors at an annual fee of approximately 0.4 percent of its value. This is
classified as a domestic investment and is the first product in S.A through which institutional as well as
retail investors can invest in gold bullion.
FIGURE 13: WORLD GOLD DEMAND MARKETS, 2013.
Source: Klapwijk, et al, 2014, pp 8 – 9
Local gold markets consist of fabrication and specialised uses, such as dentistry and electronic fabrication,
as well as gold reserves purchases through South African Reserve Bank (SARB). Since 2010, Central
Banks have been net buyers of gold, driven in part by uncertainty over the future of the international
monetary systems and the need to diversify reserves. The SARB maintained its level of gold reserves at
125.1 t, which are passively managed. However, its value decreased by 7.1 percent from R59.29 billion in
2012 t R55.06 billion in 2013.
47.6 %
8.2 % 8.3 %
35.9 %
Jewellery Industrial Fabrication Net Official Sector Retail Investment
53
PRICES AND REVENUES
The average dollar gold price, at $1 410.92/ozt, was 15.6 percent lower in 2013 compared with 2012. The
metal averaged $1 672/oz in January 2013 and $1 223.50/oz in December 2013, a decrease of 26.8
percent, due to continued economic recovery as a result of the emergence of the Federal Reserve‟s
massive debt restructuring program, coupled with increases in United States‟ (U.S) treasury yields and
equity markets.
The average gold price decreased by 5.2 percent, to $1 630.83/oz in the first quarter of 2013, as a result of
stronger U.S retail manufacturing data, coupled with lower-than-expected uptake in Indian fabrication.
Strong international market trends coupled with weaker international currencies, resulted in a 13.3 percent
decline to $1 414.28/oz in the second quarter of 2013. The price continued to decrease during the third and
fourth quarters of 2013, as a result of negative forward rates, meaning that investors were being paid
interest to provide gold to the market.
FIGURE 14: AVERAGE GOLD PRICE MOVEMENTS IN RANDS AND DOLLARS, 2013.
Source: LBMA, 2012, 2013
SARB, 2012, 2013
Low gold prices coupled with a drop in the total sales volumes in 2013, resulted in the total sales value
decreasing by 25.6 percent from R76.82 billion in 2012 to R57.19 billion in 2013 (Table 21). Local export
sales value and mass decreased by 31.9 percent and 25.1 percent, respectively in 2013, mainly due to a
drop in the average $/oz gold price that outweighed a 17.5 percent weaker exchange rate during the same
period (Table 21).
0.00
200.00
400.00
600.00
800.00
1 000.00
1 200.00
1 400.00
1 600.00
1 800.00
11 500.00
12 000.00
12 500.00
13 000.00
13 500.00
14 000.00
14 500.00
15 000.00
$/o
z
R/o
zt
R/oz $/oz
54
KEY DEVELOPMENTS
Mine closures and industrial action were some of the challenges experienced by the gold industry in 2013,
as prices remained weak and costs escalated. Higher operating costs, which rose above the $1 200/oz
mark, forced most companies to look at innovative cost-cutting measures, as well as optimising high yield
operations.
Sibanye Gold (Pty) Ltd announced its intention to mine Uranium (U3O
8) at its Beatrix shaft 1 in early April
2013. Despite being utilised for gold mining, the shaft was originally designed to mine Uranium. This new
development is expected to increase life-of mine as well as offset ailing gold production, which could
contribute to a higher operating margin and help sustain employment at the shaft. In addition, there are
plans to reform the Beatrix Mine 2 and 3 into more profitable operations. However, this initiative could
affect as many as 3 300 employees at its development section.
Gold Fields (Pty) Ltd. announced during early April 2013, that it is expanding its South Deep gold mine,
which is expected to ramp up production to an estimated 700 000 ounces per year, creating an additional
300 jobs. In line with this, its metallurgical plant has also been expanded from 220 000 tons per month
(t/pm) to 330 000 t/pm.
Harmony (Pty) Ltd announced in April 2013 that its Phakisa expansion project was nearing completion and
is expected to operate at a depth of 2 400 metres, with an ore-capacity of 72 000 t/pm. Development
activities are currently centred close to the shaft in the lower-grade Southern areas. A major drive is
planned to access higher-grade areas, thus moving closer to average reserve grade.
EMPLOYMENT
Total employment in the gold mining sector fell by 7.5 percent from 142 201 in 2012 to 131 591 in 2013,
due to the liquidation of one gold operation, retrenchments and production interruptions (Table 22). In
contrast, total remuneration increased by 5.4 percent in the same period, due to the issuing of voluntary
packages. Productivity in rand per employee increased by 13.9 percent, from R156 387 in 2012 to R178
165 in 2013.
55
TABLE 22: SOUTH AFRICA‟S GOLD MINES, EMPLOYMENT AND REMUNERATION, 2009 – 2013.
YEAR NUMBER OF EMPLOYEES* REMUNERATION
Total Male Female Total Male Female
R ' 000 R ' 000 R ' 000
2009 159 925 150 562 9 363 17 371 249 16 338 917 1 032 332
2010 157 019 145 865 11 154 19 844 856 18 481 016 1 363 840
2011 144 799 133 172 11 627 20 840 802 19 219 230 1 621 572
2012 142 201 129 940 12 261 22 238 338 20 342 069 1 896 269
2013 131 591 119 290 12 301 23 444 918 21 330 442 2 114 476
Source: DMR, Directorate Mineral Economics
Note: *Average number of employees in service, including contractors
OUTLOOK
Gold scrap supply is expected to fall modestly with a gradual decline in price levels. In contrast, Central
Bank purchases are expected to increase again in 2014, which could have a positive impact on the gold
price. Weak gold prices coupled with rising costs could put pressure on South Africa‟s gold sector. It is thus
critical that the sector implements efficient and effective methods of mining. South Africa‟s production is
expected to decrease by 9.0 percent to 145.1 t in 2014, due to a decrease in its reserves.
Total world gold demand is expected to increase in 2014, owing to major increases in investment-grade
jewellery demand, coin and bar purchases. Physical demand is expected to decrease, even at a price of $1
300/oz in 2014. In contrast, investment demand and Exchange Traded Funds (ETF‟s) are expected to
increase in-line with a decrease in the dollar gold price. Local demand is expected to increase, coinciding
with a ramp up of local jewellery hubs.
The price in rand terms is forecast to increase by 1.0 percent to an average of R441 622/kg, aided by a 9.7
percent weaker R/$ exchange rate. In contrast, the average gold price in dollar terms is expected to
decrease by 8.9 percent from $1 410.86 /oz in 2013 to $1 285.35/oz in 2014, on the back of a
stronger U.S economy.
REFERENCES
1. DMR, Directorate Mineral Economics statistics
2. Klapwijk P, Walker P, et al, 2013. Gold Survey 2014: GFMS Ltd, London, 121 pp
3. London Bullion Market Association, 2014. Internet Website: http://www.lbma.org.uk/?area=stats&page=gold/2001monthlygold
4. South African Reserve Bank, 2013, 2014. Internet Website: http://www.reservebank.co.za/internet/publication.nsf/
5. US Geological Survey, 2013. Mineral Commodity Summaries, 2014: Internet Website:
http://minerals.usgs.gov/minerals/pubs/commodity/gold/mcs-2014-gold.pdf
6. The Jewellery Council of South Africa, 2009 - 2013
56
PLATINUM-GROUP METALS (PGMs)
Donald O Moumakwa
SUPPLY-DEMAND
Despite production disruptions in South African (SA) mines due to labour unrests, global platinum group
metals (PGMs) supplies were largely unaffected in 2013. According to Johnson Matthey‟s PGMs Review
of 2014 (Platinum 2014), platinum supplies increased by a modest 2.5 percent to 181 metric tonnes (t),
with SA accounting for just over 72 percent (Fig. 1). Russia supplied 13.2 percent of global supplies, while
others, including North America and Zimbabwe, accounted for the remaining 14 percent. Palladium
supplies remained almost flat at 203t, with SA and Russia responsible for 37.4 percent and 40.4 percent,
respectively. Rhodium supplies were down 2.6 percent to 22t, most of which (77 percent) were from SA.
FIGURE 15: GLOBAL PGMs SUPPLY, 2013.
Source: Johnson Matthey‟s Platinum 2014.
Production disruptions were more prominent in the first and last quarters of 2013, most notably as
Amplats‟s workers protested over the company‟s plans to cut as much as 14 000 jobs and Northam‟s
workers demanded higher wages. However, data collected from the mines by Directorate Mineral
Economics reveal that the country‟s production (including ruthenium and iridium) improved by 3.4 percent
to 264.2t, 52 percent of which was platinum (Fig. 2). Local sales dropped by 8.5 percent to 27.8t, mainly
as a result of the automotive sector components strike during the third quarter of the year (Table 23).
Export sales increased by 13.2 percent to 238.7t due to a combination of relatively better economic outlook
and improved demand profile from Europe and Asia.
0
50
100
150
200
250
Pt Pd Rh
met
ric
ton
nes
SA Russia Others
57
FIGURE 16: SA PGMs PRODUCTION, 2013.
Source: Directorate Mineral Economics.
TABLE 23: SA PGMs MINE PRODUCTION AND SALES, 2013.
Production Local sales
Export sales
Total sales
Platinum Mass (t) Mass (t) Value (R
mil) Mass (t) Value (R mil) Mass (t)
Value (R
mil)
2013 137.0 11.2 5 119.0 122.5 55 312.0 133.7 60 431.0
2012 128.6 12.6 5 113.3 115.0 45 003.4 127.6 50 116.7
%
Change 6.5 - 11.1 .1 6.5 22.9 4.8 20.6
Palladium
2013 76.0 15.0 3 327.0 60.8 13 148.0 75.8 16 475.0
2012 74.7 16.0 2 652.4 57.2 9 133.1 73.2 11 785.5
%
Change 1.7 - 6.3 25.4 6.3 44.0 3.6 39.8
Rhodium
2013 18.1 1.1 358.0 16.1 5 065.0 17.2 5 423.0
2012 17.8 1.2 403.5 16.7 5 346.5 17.9 5 750.0
%
Change 1.7 - 8.3 - 11.3 - 3.6 - 5.3 - 3.9 - 5.7
All PGMs
2013 264.2 27.8 8 886.0 238.7 75 348.0 266.5 84 234.0
2012 254.3 30.4 8 285.2 210.9 60 924.0 241.3 69 209.2
%
Change 3.9 - 8.6 7.3 13.2 23.7 10.4 21.7
Source: Directorate Mineral Economics.
Ir, 2%
Pd, 29%
Pt, 52%
Rh, 7% Ru, 10%
264.2t
58
Demand for platinum and palladium exceeded supply for the second consecutive year in 2013, according
to data from Platinum 2014. Despite the recovery of 62.4t of platinum from recycling, the metal‟s market
was undersupplied by 29.5t after gross demand increased by 9.1 percent to 272.9t (Fig. 3). Of particular
interest is the investment demand, which increased by 93.5 percent on the back of SA Absa platinum
backed exchange traded fund (ETF). It is considered the largest such fund in the world, having grown at an
average of 2.3t per month since it was launched in April 2013. Autocatalyst demand for platinum continued
its downward spiral, but still accounted for more than 35 percent of gross demand. By contrast, jewellery
demand improved by 8.8 percent and was responsible for just less than 35 percent of gross demand.
FIGURE 17: GLOBAL PGMs GROSS DEMAND AND RECYCLING, 2013.
Source: Johnson Matthey‟s Platinum 2014.
The palladium market was also under-supplied by 11.8t in 2013 as autocatalysts demand reached yet
another record of 214.9 t, representing just over 73 percent of gross demand. Jewellery demand continued
to decline, falling to 11.1t from 12.6t in 2012, as a result of falling production from China. Physical
investment demand for palladium resulted in liquidation of 0.2t, while the 78.8t of metal recovered from
recycling could not help ensure a balanced market. The rhodium market was once again close to balance
in 2013, with 24.8t of autocatalyst demand partly accounted for by the 8.5t recovered from recycling.
The majority of refined SA PGMs production was sold to a diverse range of customers across various
global destinations, mostly Asia and Europe, the largest markets in terms of catalytic converters and
jewellery industries. Smaller portions were consumed locally, almost entirely by the catalytic converters
industry, and in North America by industrial applications.
PRICES AND REVENUE
In early 2013, PGMs prices drew strength from concerns over supply from SA after Amplats announced
restructuring plans that would have had a significant cut in production capacity (Fig. 4). However, the
-100
0
100
200
300
Pt Pd Rh
met
ric
ton
ne
s
Autocatalyst Jewellery Industrial Investment Other Recycling
59
effect was relatively less significant on palladium and rhodium. The former was buoyed by media reports
of a diminishing Russian stockpile, while rhodium was supported by buying from Asia and an increase in
investment demand. However, rhodium was soon on a downward spiral as buying interest dissipated, and
never recovered until the end of 2013.
FIGURE 18: PGMs MONTHLY AVERAGE PRICES, 2013.
Source: Johnson Matthey
Platinum and palladium were eventually weakened by heavy selling of gold, but the situation could have
been worse for platinum, had it not been for increasing investment demand in April after the launch of the
ETF by Absa bank in SA. Concerns over supply disruptions in SA resurfaced in August as wage
negotiations approached, exerting upward pressure on both platinum and palladium. The two metals were
then governed by the falling gold price, which suffered from a slight easing of international tensions over
Syria. Palladium was boosted by an announcement by Absa bank that a palladium ETF would be
launched by the end of 2013. However, weak autosales in Europe and worries over slowdown in Chinese
economic growth dented investor confidence, although prices generally continued to react more to
monetary policy than supply-demand fundamentals. By the end of the year, only palladium had made
some gains, while platinum and rhodium had lost $195/oz and $105/oz, respectively, from their opening
prices of 2013 (Table 24). Furthermore, the average price of palladium was 13 percent higher than in 2012
at $727/oz, while rhodium averaged 18 percent lower at $1 059/oz.
700.00
715.00
730.00
745.00
760.00
775.00
800.00
1000.00
1200.00
1400.00
1600.00
1800.00
Jan
Feb
Mar
Ap
r
May Jun
Jul
Au
g
Sep
Oct
No
v
Dec
Pd
($/
oz)
Pt
& R
h (
$/o
z)
Pt Rh Pd
60
TABLE 24: LONDON BASE PRICES OF PGMs, 2013.
($/oz) Pt Pd Rh
Opening Price 1 556 708 1 080
Closing Price 1 361 714 975
Losses/Gains - 195 6 - 105
2013 Average Price 1 492 727 1 059
2012 Average Price 1 552 643 1 284
% Change (Ave. Price) - 4 13 - 18
Source: Johnson Matthey
Despite a drop in prices of some PGMs metals, SA sales revenue increased by 21.7 percent to R84.2
billion, due to an increase in the total mass sold coupled with the weakening of the Rand (R) against the
US dollar ($). Export revenue increased by 23.7 percent to R 75.3 billion, boosted by better economic
outlook and improved demand profile from Europe and Asia. Despite a drop in the local mass sold, the
corresponding revenue increased by 7.3 percent to R 8.9 billion due to a larger R/$ exchange rate. The
PGMs industry contributed 21.9 percent to SA‟s total mineral sales revenue, positioning the sector as the
second largest revenue earner in 2013, after coal.
KEY DEVELOPMENTS
Prevailing market conditions continued to weigh down heavily on some producers, resulting in project
suspensions and, in some cases, mine closures as part of restructuring plans. This affected employment
negatively in the sector, despite efforts by the government and unions to mitigate the effects. Labour
unrests continued to negatively impact productivity and, according to some producers, it has become
impossible to justify continued production. While the three large producers (Amplats, Implats and Lonmin)
had to once more contend with labour unrests in 2013, others continued with projects in anticipation of
improved future market conditions and some key milestones were reached.
Amplats‟s five Rustenburg operations were in August 2013 integrated into three and Union‟s two mines into
one. Khomanani mine and Khuseleka 2 shaft were placed on long-term care and maintenance, but their
mine boundaries were amended to allow their resources to be extracted from the two neighbouring mines,
Siphumelele and Thembelani mines. Furthermore, Union North and Union South mines were integrated
into Union mine, with the uneconomical Union North decline being successfully closed. However, the
number of jobs affected reduced to approximately 5 000 from the originally proposed 14 000, thanks to the
intervention of the DMR, unions and the CCMA.
Eastplats placed its Crocodile River mine on care and maintenance at the end of July 2013. The company
announced then that the mine is likely to be suspended to preserve its value, rather than mining it at a loss,
and production will not resume until economic and sustainable production can be guaranteed.
61
Approximately 92 percent of the mine‟s 2 500 jobs were affected through retrenchments and termination by
mutual agreements.
Aquarius Platinum extended the life of its Kroondal mine by 3 years to 9.5 years after agreeing with
Amplats to extend a pool-and-share agreement (PSA) on the adjacent mineral rights. In terms of the
agreement, Amplats will make just under 16 Mt of ore available from its Rustenburg mines to Kroondal
mine. In return, Aquarius will pay Amplats a royalty on the mined ore and sell the concentrate produced
from its mining activities on the land to Amplats' refineries on a toll-treatment basis. The agreement helps
de-risk Aquarius Platinum somewhat as the Kroondal mine comprises 41 percent of Aquarius total group
production.
Ivanhoe Mines was given permission to sink a bulk-sample shaft at its Flatreef discovery, Platreef project,
in South Africa's Bushveld Igneous Complex. The company started digging the 7.25m diameter Shaft 1
during the fourth quarter of 2013. The vertical shaft would descend to a depth of 800m, where the
company would collect a bulk sample in the second half of 2015, which would be used to complete a
development assessment of the Flatreef deposit. In June 2013, Ivanhoe filed a mining right application for
the Platreef project with the DMR to mine and process minerals from the mining area for a maximum
period of 30 years, which could be extended upon application.
At least six projects are expected to commence production in 2015. These are Platinum Australia‟s
Kalahari and Rooderand projects, Platinum Group Metals Western Bushveld JV, Platmin‟s Mphahlele and
Grootboom projects, as well as Royal Bafokeng Platinum‟s Styldrift Merensky Phase 1 project. The latter
is an expansion of existing operations, while the rest are all new mine developments. By the end of 2013,
these projects were all progressing well, except the Kalahari project which was delayed by power supply
disruptions and infrastructural challenges. Combined, the projects are expected to create at least 8 000
jobs and produce at least 1 Moz of PGMs per annum.
EMPLOYMENT
Average employment in the PGMs industry declined by 2.9 percent to 192 051 in 2013 as current market
conditions and labour unrests took their toll on some producers (Table 25). However, total remuneration
increased by 8.1 percent, resulting in an 11.4 percent increase in the average remuneration per employee.
Average productivity per employee increased by 7.8 percent to 1.38 kg.
62
TABLE 25: EMPLOYMENT (INCLUDING CONTRACTORS) AND REMUNERATION IN SOUTH AFRICA'S
PGM MINES, 2013.
YEAR AVERAGE NUMBER
OF EMPLOYEES
TOTAL REMUNERATION
(R'000 000)
AVERAGE
REMUNERATION
(R/employee)
2009 184 163 24 879 135 093
2010 182 003 26 577 146 027
2011 194 979 30 413 155 980
2012 197 847 34 409 173 917
2013 192 051 37 210 193 750
Source: DMR, Directorate Mineral Economics
OUTLOOK
Global supplies of PGMs are expected to decrease substantially in 2014 as a result of supply constraints
from SA after a prolonged strike in the first half of the year. Some SA mines, particularly those that were
affected by the strike, remain under serious cost pressures and a substantial amount of capacity could be
shut down in 2014. Palladium supplies are expected to be further lessened as Russian stocks continue to
diminish.
Demand for platinum from the investment sector is expected to increase, further exacerbating the supply
deficit in 2014. The metal‟s price is expected to pick up during the second half of 2014 as above-ground
stocks continue to be depleted before mines return to full production. While autocatalyst demand for
palladium is expected to remain robust, investment demand has been further influenced by the successful
launch of two SA ETFs. As a result, the palladium market is also expected to be undersupplied in 2014,
which is likely to propel the price to record levels by year-end. Demand for rhodium in autocatalysts is
expected to increase as global production of light duty vehicles continues to expand, leaving the market in
deficit and price inflated.
REFERENCES
1. DMR, Directorate Mineral Economics.
2. Johnson Matthey: www.platinum.matthey.com.
3. Platinum 2014, Johnson Matthey plc.
4. Miningmx.com, 29 April 2014.
5. www.forbes.com, 12 October 2013.
6. Miningweekly.com, 09 September 2013.
7. Miningmx.com, 25 June 2013.
63
SILVER
PJ Perold
SUPPLY-DEMAND
Total global silver supply, which includes mine production and secondary supply-sources, decreased by 3.3
percent from 1 005.3 million ounces (Moz) in 2012 to 978.1 Moz in 2013. According to the Silver Survey
2014, mine production, inclusive of output from the lead and zinc sectors, remained the largest single
contributor to total mine supply, contributing 83.8 percent (819.6 Moz), while secondary supply contributed
16.2 percent (Fig.1). Mexico remained the world‟s largest silver producing country, despite production levels
declining by 1.5 percent to 169.7 Moz in 2013. Peru overtook China as the second largest producer,
followed by China and Australia at third and fourth positions, respectively. South Africa‟s (S.A) production
increased by 2.2 percent to 2.21 Moz in 2013, and contributed only 0.2 percent to total world supply,
retaining its ranking as the twentieth largest producer.
FIGURE 19: GLOBAL SILVER PRODUCTION BY SOURCE, 2013.
Source: Silver Survey, 2014
S.A produces the metal mainly as a by-product from two copper operations, thirteen gold operations and two
Platinum Group Metals (P.G.M) operations. Copper operations contributed roughly 87.5 percent to S.A‟s
total silver production, while production from gold and P.G.M operations jointly contributed 12.5 percent (Fig.
2). An increase of 5.4 percent in silver production recovered from copper operations offset the decline in
production from the gold and P.G.M operations, which dropped by 3.8 percent and 7.7 percent, respectively,
in 2013. Despite a 2.3 percent increase in production, local and export sales mass decreased by 2.2 percent
and 23.1 percent respectively as production gains in mine supply were more than offset by a decrease in
83.8 %
16.2 %
Mine production Secondary supply978.1 Moz
64
scrap supply. Export sales mass decreased due to a tighter global regulatory environment,
coupled with the exhaustion of coin and jewellery recycling in the country.
FIGURE 20: S.A SILVER PRODUCTION BY SOURCE-2012, 2013.
* Including recovery ops
# Including by-product derived from copper and lead-from-copper production
**Source: DMR Statistics, 2013, 2014
TABLE 26: SOUTH AFRICA‟S PRODUCTION AND SALES OF SILVER, 2004-2013.
Year Production
Local sales Export sales Total Sales
Mass Value Mass Value Mass Value
Moz R‟000 Moz R' 000 Moz R‟000
2004 2.30 0.2 4 659 2.3 93 995 2.5 101 478
2005 2.80 0.1 7 483 3.2 137 844 3.3 143 504
2006 2.80 0.2 5 660 3.0 239 595 3.2 250 621
2007 2.20 0.1 11 026 2.5 224 146 2.6 235 041
2008 2.40 0.3 10 895 2.8 318 573 3.0 346 845
2009 2.50 0.3 28 272 2.3 256 198 2.5 287 103
2010 2.50 0.2 30 906 2.5 350 439 2.7 386 078
2011 2.40 0.3 35 639 2.3 531 932 2.6 611 933
2012 2.16 *0.20 49 591 2.5 533 232 2.5 582 824
2013 2.21 *0.24 43 179 2.0 410 158 2.2 453 336
Y-o-y (%) 2.2 20.0 -12.9 -20.0 -23.1 -12.0 -22.2
Source: DMR Statistics, 2004-2014
56.9 t
8.0 t
2.4 t
60.0 t
7.7 t
0.9 t 0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Copper# Gold P.G.M
Byp
rod
uct
Pro
du
ctio
n (t
)
2012 20132.21 Moz
65
According to the Silver Survey, world silver demand, which consists of industrial fabrication, coins and bars,
jewellery and silverware increased by 13.3 percent to 1 081.1 Moz. This was largely due to a 76.3 percent
increase in retail investment in bars and coins, supported by an increase in jewellery and silverware
fabrication, which rose by 12.1 percent and 9.6 percent, respectively.Total world demand was driven by
industrial fabrication at 54.3 percent of total demand, followed by coins and bars as well as jewellery at 22.7
percent and 18.4 percent, respectively (Fig. 3). South Africa‟s silver demand was primarily driven by
jewellery and electronic components.
FIGURE 21: WORLD SILVER CONSUMPTION (Moz) BY SECTOR, 2013.
Source: World Silver Survey, 2014
PRICES AND REVENUE
Despite a 75.8 Moz market undersupply in 2013, silver annual price decreased by 23.5 percent from $
31.15/oz in 2012 to $ 23.83/oz in 2013. The debt limit bill signed by the United States on 3 January 2013, to
avoid the fiscal cliff, exerted downward price-pressure during the first quarter of 2013. The average price
decreased by 23.2 percent to $ 23.11/oz in the second quarter of 2013 (Fig. 4), mainly as a result of the
Euro Central Banks‟s (ECB) decision to sell €400 million worth of gold which reinforced declines in the silver
metal due to the inverse correlation of the metal to the gold price ratio. Prices declined by 13.1 percent to $
19.61/oz, in the third quarter of 2013, coinciding with the debt limit bill that avoided technical default and
reopened U.S markets.
Revenue from total sales amounted to R 453 million, a 22.0 percent drop compared with 2012 revenue, due
to lower sales mass and prices in the same period. The metal contributed 0.16 percent to total mining sales
revenue in 2013. Local sales value decreased by 12.9 percent to
18.4 %
22.7 %
4.6 %
54.3 %
Jewelry Coins and Bars Silverware Industrial Fabrication
1 018 Moz
66
R 43.2 million, due to lower local uptake. Similarly, export sales value decreased by 23.1 percent, in-line with
declining prices, large-scale ECB selling and stronger U.S markets.
FIGURE 22: MONTHLY AVERAGE SILVER PRICES, 2013.
Source: Silver fixings, LBMA, 2014
OUTLOOK
Global silver supply is expected to increase in 2014, exceeding the 3.4 percent growth in 2013, driven by
stronger demand from fabrication. Total silver output is expected to increase, as global gold production
surges, thus impacting on the recovered volumes of silver as by-product. Growth will be mainly driven by
strong increases in South America as large projects are ramped up and additional by-product recovered
from the metal‟s primary production. Scrap-supply is expected to grow as a result of unpredictable and
vigorous changes in the silver prices. Global government sales are expected to increase, backed by strong
demand for silver bullion bars.
In South Africa, silver output is expected to increase marginally, due to higher copper production. Stronger
gold recovery resulting from higher recovered grades will aid local production. The silver price is expected
to decrease by 0.116 percent to $ 23.7/oz, in line with a 52:67 internationally accepted price ratio of gold to
silver.
REFERENCES
1. DMR, Directorate Mineral Economics.
2. The Silver Institute, www.silverinstitute.org.
3. World Silver Survey, 2014
4. Silver fixings, LBMA, 2014
5. http://www.tradingnrg.com/gold-price
6. http://www.forecasts.org/gold.htm
7. http://blogs.marketwatch.com/thetell/2012/07/10/silver-targets-lowered-for-second-half-of-year/
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
$/o
z
2013 2012
67
ENERGY MINERALS OVERVIEW
KL Revombo
SUPPLY - DEMAND
South Africa‟s coal and uranium resources are ranked among the top ten in the world. The country‟s
uranium resources are ranked 5th globally, Africa‟s largest resources followed by Namibia and Niger. After
updating the coal resources, South Africa‟s coal reserves that are located mainly in Mpumalanga, northern
Kwazulu-Natal and Limpopo provinces are now ranked 5th. In 2013, South Africa was the 7
th largest coal
producer in the world and the 11th uranium producer. Uranium is mainly produced as a by-product from
gold and copper mines.
The country has not yet fully quantified the deposits of oil and gas, but potentially hosts large quantities of
shale gas in the Karoo basin and offshore. South Africa imports more than 60 percent of the feedstock
required for liquid fuel production with the remainder derived from synthetic fuels, which are produced
locally from coal and natural gas.
According to the BP Statistical Review of World Energy 2014 (BPSRWE, 2014), global oil production
appreciated by 0.6 percent to 86.81 million barrels per day (mbpd) in 2013, from 86.15 mbpd in 2012. The
Organization of Petroleum Exporting Countries‟ (OPEC‟s) output dropped by 1.8 percent to 36.83 mbpd
whereas non-OPEC countries‟ production increased by 2.7 percent to 36.06 mbpd.
Global oil consumption increased by 1.4 percent to 91.33 mbpd in 2013. Non-OECD countries accounted
for 51 percent of the global oil consumption and once again, this growth accounted for the net growth in
global oil consumption. The OECD consumption declined by 0.4 percent (BPSRWE, 2014). The largest
increases were recorded by the USA (400 thousand barrels per day (tbpd)) outpacing Chinese growth of
390 tbpd for the first time since 1999. The largest percentage decrease was Japan‟s 158 tbpd. Oil prices
averaged $108.66 per barrel in 2013, a decline of 2.7 percent from $111.67 in 2012.
World natural gas output grew by 1.1 percent to 3 390.5 billion cubic metres (bcm) in 2013 from 3 364.1
bcm in 2012 (BPSRWE 2014). At 1.3 percent growth, the USA was the largest producer. However,
Russia‟s 17.8 percent (12.4 bcm) was the world‟s largest volumetric increase, followed by China‟s 9.5
percent and Qatar‟s 5.4 percent (7.7 bcm). Due to the incessant sabotage of oil and gas assets, Nigeria
recorded the largest volumetric decline at 16.4 percent, followed by India (16.3 percent) and Norway (5
percent).
Natural gas accounted for 23.7 percent of primary energy consumption in 2013 (BPSRWE, 2014), an
increase of 1.4 percent to 3 347.6 bcm in 2013. China and the USA with growths of 10.8 percent and 2.4
percent respectively, recorded the largest increments in world consumption, together accounting for 81
percent of global consumption. In the OECD countries, consumption grew by 1.8 percent whereas in the
68
non-OECD countries, it increased by 1.1 percent. India‟s decline of 12.2 percent was the world‟s largest
volumetric decline and the European Union‟s decrease of 1.1 percent was the lowest drop since 1999.
In 2013, coal production increased by 0.4 percent to 7 822.8 Mt (Coal Information, 2014), the weakest
growth since 2002. Indonesia‟s 10.1 percent and Australia‟s 6.6 percent were the largest volumetric
increments. Despite the marginal growth of 0.8 percent, China, at 3 560.7 Mt, remained the largest
producer, followed by the USA (904 Mt), India (612.8 Mt) and Australia (459.3Mt).
Coal‟s share of global primary energy consumption reached 30.1 percent, the highest since 1970. Global
coal consumption grew by 2.5 percent to 7 875.7 Mt in 2013 from 7 687.3 Mt in 2012 (BPSRWE, 2014).
China accounted for 49.3 percent of global coal consumption, followed distantly by the USA‟s 10.7 percent
and India‟s 10 percent. South Africa at 183.9 Mt was 5th. The OECD coal consumption decreased by 25.6
percent to 2 135.6 Mt owing to weaker demand in these countries. Total consumption in the non-OECD
countries grew by 4 percent to 5 740 Mt mainly due to demand in China, which further strengthened its
position as the world‟s largest coal-consuming country in 2013. Coal prices spiralled downward in 2013
owing to market oversupply.
World uranium mine production increased by 1.1 percent from 151.2 Mlb in 2012 to 152.9 Mlb U3O8 in
2013. When combined with secondary sources, this figure rose to 206 million pounds U3O8. Kazakhstan
dominated world output, accounting for 38.2 percent of production, followed by Canada‟s 15.8 percent and
Australia‟s 10.7 percent. Namibia was the largest producer in Africa accounting for 7 percent of world
production, followed by Niger at 6.8 percent.
TABLE 27 SOUTH AFRICA‟S PRODUCTION AND SALES OF ENERGY COMMODITIES, 2013
Source: DMR, Mineral Economics Directorate
In 2013, South Africa‟s saleable coal production decreased by 0.9 percent to 256.3 Mt from 258.6 Mt in
2012, while uranium production surged by 13.7 percent to 626 t (Table 27). The country‟s natural gas
production amounted to 0.66 Mt, a 29.4 percent decrease from 2012. Similarly, natural gas condensate
PRODUCTION
kt kt R'000 kt R'000 kt R'000
2012 258 576 185 669 43 921 277 76 009 52 226 904 261 677 96 148 181
2013 256 282 183 914 49 569 211 74 566 51 813 484 258 480 101 382 695
2012 0.551 * * * * * *
2013 0.626 * * * * * *
2012 258 576 185 669 43 921 277 76 009 52 226 904 261 677 96 148 181
2013 256 283 183 914 49 569 211 74 566 51 813 484 258 480 101 382 695
2012 934 934 2 195 735 - - 934 2 195 735
2013 660 660 1 755 972 - - 660 1 755 972
2012 89 89 910 269 - - 89 910 269
2013 61 61 705 006 - - 61 705 006
2012 1023 1023 3 106 003 - - 1023 3 106 003
2013 721 721 2 460 977 - - 721 2 460 977
TOTAL SALES
Uranium Oxide
Subtotal
Natural Gas
Natural Gas
Condensate
Subtotal
Coal
COMMODITY YEAR
LOCAL SALES EXPORT SALES
69
output plunged by 31 percent to 0.061 Mt from 0.089 Mt during the same period. South Africa‟s crude
petroleum production fell by 59.5 percent to 138 928 barrels compared with 343 072 barrels in 2012, as a
result of maintenance stoppages during the year.
EMPLOYMENT
Employment in South Africa‟s energy sector increased by 6.3 percent from 83 538 in 2012 to 88 784 in
2013 (Table 28). The coal industry continued to dominate with 87 768 (98.9 percent) jobs whereas the oil
and gas accounted for the remainder (1 016 jobs). In 2013, total remuneration increased by 8.7 percent to
R19.2 billion raising average annual earnings by 2.3 percent to R215 664 per employee.
TABLE 28: EMPLOYMENT AND GROSS REMUNERATION ON MINES AND PLANTS IN THE SOUTH
AFRICAN ENERGY INDUSTRY, 2005 – 2013
YEAR EMPLOYEE REMUNERATION
Number R'000 R'000/Employee
2005 57 185 6 558 129 114.7
2006 57 936 7 340 151 126.7
2007 60 698 8 778 627 144.6
2008 65 739 11 138 368 169.4
2009 70 970 12 947 469 182.4
2010 75 021 14 352 946 191.3
2011 78 761 16 242 879- 206.2
2012 83 538 17 612 592 210.8
2013 88 784 19 147 531 215.7
Source: DMR, Mineral Economics Directorate
OUTLOOK
It could take years to clear the oversupply of coal globally, because coal producers seem reluctant to cut
output while low-cost mines are still making money in the weak pricing environment (SNL Metals and
Mining). More than 50 Mt of coal needs to be taken off the global market to control the oversupply situation.
Oversupply in global markets will continue for some time, awaiting either producer rationalization or
sufficient demand growth to absorb the extra capacity. In 2014, prices will remain subdued due to the
overcapacity of the international markets.
Gas is the fastest growing fossil fuel and its rapid growth is faster than that of the total energy growth while
oil is the slowest. The fast growth of gases is supported by the rapid growth in shale gas, the fastest
growing source of gas, supplying nearly half of the growth in global gas output. However, world oil supply is
expected to increase in 2014 with most of the growth coming from producers outside the Organization of
Petroleum Exporting Countries (OPEC) such as the United States, Canada and Sudan.
70
South Africa‟s coal consumption is expected to increase in 2014 following Eskom‟s commissioning of
Medupi power station. Unit 6 of Medupi is planned to be connected and synchronized to the power grid in
December 2014. While several new coal projects started operating in the first half of 2014, others are
expected to start producing in the last quarter of the year. South Africa‟s coal production is forecast to grow
by about two percent to about 262 Mt in 2014 from 256 Mt in 2013.
In the short to medium term, the country will continue to import gas and crude oil to meet its liquid fuel
requirements, about 30 percent of which is met by Sasol‟s coal-to-liquid technology. In the medium term to
long term the situation may change as a few companies were awarded exploration permits for oil and gas
off the coast of South Africa. Exploratory hydraulic fracturing is still needed to determine the commercial
prospects of shale gas which has a potential to contribute to the country‟s energy industry. According to the
Energy Information Administration (IEA), South Africa hosts about 485 trillion cubic feet recoverable
reserves. If shale gas reserves are proven and environmental concerns are alleviated, then development of
the shale gas industry has a potential of contributing to South Africa‟s energy mix. Even though gas
infrastructure and production are limited, the country has some experience in this sector and would be
capable of ramping up the level of expertise required to manage the creation of a domestic gas industry.
The ever-present uranium stockpiles will affect the future development of uranium mining projects.
However, the delay in the development of these projects could have positive spin offs in the medium to
long term once local value addition intensifies consistent with the Beneficiation strategy.
REFERENCES
1. BP Statistical Review of World Energy, June 2014
2. Department of Mineral Resources, Mineral Economics Directorate
3. Coal Information 2014, International Energy Agency – OECD/IEA, 2014
4. SNL Metals and Mining Daily, volume 2 Issue 192, 30 September 2014
71
COAL
KL Revombo
SUPPLY - DEMAND
Global coal proven reserves increased by 7.8 percent to 928 075 Mt at the end of 2013 as Indonesia and
South Africa updated reserve statements. Indonesia‟s proven reserves increased by 407 percent to 28
017 Mt while South Africa‟s grew by 121 percent to 66 700 Mt.
Total global coal production increased by 0.4 percent from 7 794.4 Mt in 2012 to 7 822.8 Mt in 2013 (Table
29), the weakest growth since 2002. Indonesia‟s 10.1 percent and Australia‟s 6.6 percent where the largest
volumetric growths in production in 2013. Despite a marginal growth of 0.8 percent, China remained the
largest producer contributing 3 560.7 Mt to world total, followed by the United States of America (USA)
(904 Mt), India (612.8 Mt), Australia (459.3 Mt) and Indonesia (488.6 Mt).
TABLE 29: WORLD COAL RESERVES, PRODUCTION AND EXPORTS, 2013
COUNTRY RESERVES
1 PRODUCTION
2 EXPORTS
2 CONSUMPTION
2
Mt % Rank Mt % Rank Mt % Rank Mt % Rank
Australia 76 400 8.2 4 459.3 5.9 5 336.3 25.2 2 121.3 1.5 7
Canada 6 582 0.7 11 68.9 0.9 11 36.3 2.7 7 40.9 0.5 11
China 114 500 12.3 3 3 560.7 45.5 1 7.3 0.5 - 3 880.6 49.3 1
Colombia 6 746 0.7 10 85.4 1.1 10 74.3 5.6 6 7.1 0.1 12
India 60 600 6.5 6 612.8 7.8 3 1.5 0.1 - 791.2 10.0 3
Indonesia 28 017 3.0 9 488.6 6.2 4 426.1 32.0 1 62.5 0.8 10
Kazakhstan 33 600 3.6 8 119.9 1.5 9 32.7 2.5 8 87.5 1.1 8
Poland 5 465 0.6 12 142.8 1.8 8 11.1 0.8 - 144.5 1.8 6
Russia 157 010 16.9 2 347.2 4.4 6 140.8 10.6 3 234.8 3.0 4
South Africa* 66 700 7.2 5 256.3 3.3 7 74.6 5.6 5 183.9 2.3 5
Ukraine 33 873 3.6 7 65.8 0.8 12 5.6 0.4 - 75.9 1.0 9
USA 237 295 25.6 1 904.0 11.6 2 106.7 8.0 4 842.9 10.7 2
Other 101 287 10.9 - 711.1 9.1 - 80.0 6.0 - 1 402.6 17.8 -
Total 928 075 100.0 - 7 822.8 100 - 1 333.3 100 7 875.7 100.0 -
Source: 1BP Statistical Review of World Energy, June 2014
2Coal Information 2014, International Energy Agency – OECD/IEA
*DMR, Mineral Economics Directorate – reserves, production and exports figures
The Organization for Economic Co-operation and Development (OECD) countries‟ coal production dropped
by 1.5 percent from 2 024.5 Mt in 2012 to 1 994.4 Mt in 2013 whereas the non-OECD countries which
include China, Russia, Indonesia, Kazakhstan, India and Colombia experienced a marginal growth 1.01
percent to 5 828.4 Mt.
South Africa‟s total run-of-mine (ROM) production increased marginally by 0.36 percent from 330 Mt in
2012 to 331.2 Mt in 2013, owing to an increased number of producing coal mines that increased from 83 to
72
95. Opencast mining accounted for 61.80 percent of ROM production, followed by board and pillar‟s 35.95
percent, stooping‟s 1.73 percent and longwall at 0.52 percent. Saleable coal production decreased by 0.9
percent to 256.3 Mt from 258.6 Mt in 2012 (Table 29). The five major producers: Anglo Coal, Glencore
Xstrata, Exxaro, SASOL and BHP Billiton Coal South Africa (BECSA) accounted for 84 percent of the
country‟s total saleable production and, junior coal producers accounted for the remaining 16 percent. The
four largest Black Economic Empowerment (BEE) companies, namely, Exxaro Resources, Optimum Coal
Holdings, Umcebo Mining and Shanduka, accounted for 25.6 percent of the country‟s total saleable
production. Overall, BEE companies and junior coal miners accounted for about 41.5 percent of South
Africa‟s total saleable production.
TABLE 30: SOUTH AFRICA‟S PRODUCTION AND SALES OF SALEABLE COAL, 2004 – 2013
LOCAL SALES EXPORT SALES
YEAR PRODUCTION MASS VALUE (FOR) MASS VALUE (FOB)
Mt Mt R'000 R/t Mt R'000 R/t
2004 242.8 178.3 13 606 151 76 67.9 13 490 623 213
2005 245 173.4 14 878 140 86 71.4 14 472 904 296
2006 244.8 177 16 245 861 92 68.7 21 155 176 316
2007 247.7 182.8 19 718 642 108 67.7 21 745 322 361
2008 252.7 197 30 104 161 153 60.6 44 706 204 737
2009 250.6 184.7 34 463 054 187 60.5 30 934 920 512
2010 257.2 186.4 33 702 229 181 66.8 37 477 184 561
2011 250.7 177.9 37 253 525 209 68.8 50 548 678 735
2012 258.6 185.7 43 921 277 237 76.0 52 226 904 687
2013 256.3 183.9 49 569 211 270 74.6 51 813 484 695
Source: Mineral Economics Directorate, DMR
At 61.7 percent of the total production, the Witbank coalfield remained the largest producer, followed
distantly by the Highveld‟s 20.2 percent, Waterberg‟s 7.33 percent, and Sasol-Vereeniging‟s 7.29 percent.
The Witbank, Ermelo and Sasol-Vereeniging coalfields‟ percentage production were lower compared to
2012, while the Waterberg and three of Kwazulu-Natal‟s coalfields (Utrecht, Nongoma and Klip River)
improved their production in 2013. The Mpumalanga Central basin, which comprises of Witbank, Highveld
and Ermelo coalfields, accounted for 83.5 percent of the country‟s production, a slight decline compared to
83.7 percent in 2012.
In 2013, South Africa‟s anthracite production grew by 20.5 percent to 3.62 Mt from 3.0 Mt in 2012.
Anthracite production accounts for 1.4 percent of the country‟s overall coal production (Table 31).
73
TABLE 31: SOUTH AFRICA‟S PRODUCTION AND SALES OF ANTHRACITE, 2004 – 2013
LOCAL SALES EXPORT SALES
YEAR PRODUCTION MASS VALUE (FOR) MASS VALUE (FOB)
kt kt R'000 R/t kt R'000 R/t
2004 1 247 545 224 882 412 917 235 667 257
2005 1 640 715 294 454 412 524 193 634 369
2006 1 584 821 374 113 455 672 258 063 384
2007 2 348 975 473 998 486 910 405 109 445
2008 2 207 961 581 207 604 1 265 762 064 602
2009 1 658 786 549 620 699 598 517126 863
2010 2 073.9 1 197.7 933,123 779 874 717,086 821
2011 2 553.6 1 259.4 1 127 675 895 983 892 137 907
2012 3 005.1 1 520.5 1 455 444 957 1 227 1 179 215 961
2013 3 621.3 1 727.6 1 593 658 922 1 141 1 025 465 899
Source: Mineral Economics Directorate, DMR
Bituminous coal production, which accounted for 98.6 percent of South Africa‟s total saleable coal
production, decreased by 1.1 percent to 252.7 Mt compared with 2012 (Table 32).
TABLE 32: SOUTH AFRICA‟S BITUMINOUS COAL PRODUCTION AND SALES, 2004 – 2013
LOCAL
SALES
EXPORT
SALES
YEAR PRODUCTION MASS
VALUE
(FOR) MASS
VALUE
(FOB)
Mt Mt R'000 R/t Mt R'000 R/t
2004 241.5 177.8 13 381 268 75 67.9 14 237 236 212
2005 243.3 172.7 14 583 685 84 70.9 20 961 542 296
2006 244.8 176.2 15 871 748 90 68.1 21 477 286 315
2007 245.3 181.8 19 244 643 106 66.7 24 042 564 360
2008 250.5 196.1 29 522 953 151 59.4 43 944 138 740
2009 248.9 183.9 33 913 433 184 59.9 30 417 794 508
2010 255.1 185.2 32 769 106 177 65.9 36,760,098 558
2011 248.2 176.6 36 125 849 205 67.8 49 656 540 732
2012 255.6 184.1 42 465 833 231 74.8 51 047 689 683
2013 252.7 182.2 47 975 553 263 73.4 50 788 019 692
Source: Mineral Economics Directorate, DMR
In 2013, global coal consumption grew by 2.5 percent to 7 875.7 Mt from 7 687.3 Mt in 2012. China
accounted for 49.3 percent of the total global consumption followed distantly by USA‟s 10.7 percent and
India‟s 10 percent. Approximately 70 percent of the global coal consumption was accounted for by just
74
Three countries: China, USA and India. The OECD coal consumption decreased by 25.6 percent to 2
135.6 Mt owing to weaker demand in these countries. Total consumption in the non-OECD countries grew
by 4 percent to 5 740 Mt mainly due to stronger demand from China, which further strengthened its
position as the world‟s largest coal-consuming country in 2013.
In 2013, South Africa‟s coal consumption decreased by 0.97 percent to 183.9 Mt from 185.7 Mt in 2012.
Bituminous coal, which accounted for 98.6 percent of the country‟s saleable production, saw its local sales
volume fall by 1.1 percent to 182.2 Mt whereas anthracite local sales volumes rose by 13.6 percent to 1.7
Mt due to increased demand from steel makers.
FIGURE 23: LOCAL COAL CONSUMPTION BY SECTOR (PERCENTAGE), 2013
Source: DMR, Mineral Economics Directorate
The electricity sector continued to be the leading consumer of coal in the country, accounting for 65.1
percent (119.8 Mt) of the South Africa‟s coal consumption followed distantly by the Synthetic Fuel sector‟s
21.4 percent (39.4 Mt) and Merchant and Domestic‟s 5.3 percent (9.7 Mt) as depicted in Figure 23. In
2013, industrial usage decreased to 4.02 Mt from 8.7 Mt in 2012.
According to International Energy Agency (IEA)‟s Coal Information, global coal trade rose by 4.2 percent in
2013, to reach a record level of 1 333.3 Mt. Indonesia was the world‟s leading coal exporter with 426 Mt
followed by Australia‟s 336.3 Mt and Russia‟s 140.3 Mt (Figure 24). Australia and Russia increased
2.19
65.13
2.99 5.28
0.01
21.44
2.96
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
Industries Electricity Metallurgical Merchantand domestic
Mining SyntheticFuel
Others
75
exports by 34.8 Mt (11.5 percent) and 9.1 Mt (6.9 percent) while Indonesia increased exports by 38.7 Mt
(10
percent). Exports from the USA, Colombia and South Africa all decreased slightly in 2013. The major
importers were China (327.2 Mt), Japan (195.6 Mt), India (179.9 Mt) and Korea (126.5 Mt).
FIGURE 24: MAJOR COAL EXPORTERS (Mt), 2013
Source: Coal Information 2014
South African Figure: DMR Mineral Economics Directorate
South Africa‟s coal exports declined by 1.9 percent to 74.6 Mt in 2013 from 76 Mt in 2012. Bituminous coal
exports dropped by 1.8 percent to 73.4 Mt, while anthracite exports plunged by 7 percent to 1.1 Mt. Despite
Asian exports decreasing from highs of 61.5 percent in 2012, the continent continued to be the leading
importer of South African coal accounting for 58 percent in 2013, followed by Europe‟s 22 percent and
Middle East‟s 10 percent . The Americas‟ import of South Africa‟s coal also increased from 2.4 percent in
2012 to 5 percent in 2013. Exports to Africa remained solid with Mozambique accounting for about 40
percent of Africa‟s consumption, followed distantly by Senegal‟s 11 percent, Ethiopia‟s 7.2 percent and
Kenya‟s 6.1 percent.
426.1
336.3
140.8
106.7
74.6 74.3
36.6 32.7 17.5 16.7 12 11.1
50.2
0
50
100
150
200
250
300
350
400
450
76
FIGURE 25: SOUTH AFRICA‟S EXPORT VOLUMES BY REGIONAL DESTINATION, 2013
Source: South African Revenue Services Customs
India continued to be South Africa‟s leading customer by country, accounting for 28.3 percent (21.6 Mt) of
the country‟s coal export sales followed by China‟s 17.4 percent (13.3 Mt) and Netherlands‟ 9.3 percent
(7.2 Mt). In Africa, Mozambique was the largest consumer, importing 3.6 percent of South Africa‟s coal
exports. Figure 25 depicts the top 10 countries which accounted for 82.8 percent of the country‟s exports.
58% 22%
10%
4%
1% 5% Far East /Asia
Europe
Middle East
Africa
Islands
Australasia
Americas
77
FIGURE 26: TOP 10 IMPORTERS (Mt) OF SOUTH AFRICA‟S COAL, 2013
Source: South African Revenue Services Customs
PRICES AND REVENUE
In 2013, South Africa‟s coal export prices remained subdued owing to market oversupply and weaker
demand. The average Richards Bay (FOB) export price of South African coal decreased by 13.2 percent to
$80.9 /t in 2013 from $93.2 /t in 2012. However, in Rands per ton (R/t), the average export price increased
by 2.29 percent from R762.39 /t to R779.89 /t owing to the weak rand that depreciated by 17.56 percent to
R9.65 /$ in 2013 from R8.21 /$ in 2012. In US$ terms, coal prices started the year at $86.67 /t and
gradually decreased to $73.5 /t by September 2013 due to weaker demand, especially from China and
Europe, and high stock levels at India‟s ports (Fig 5). Prices recovered during the last quarter of the year
boosted by European demand, reaching $84.97 /t by December.
21.57
13.25
7.12
5.74
2.98
2.79
2.53
2.51
2.44 2.21
India
China
Netherlands
Taiwan, Province OfChina
Israel
Portugal
Guyana
Turkey
United Arab Emirates
Italy
78
FIGURE 27: RBCT MONTHLY COAL PRICES, JANUARY 2012 – JUNE 2014
Source: Global Coal website (www.globalcoal.com)
Domestic coal prices increased by 13.9 percent from R237 /t in 2012 to R270 /t in 2013 despite the
marginal decline of 0.9 percent in local coal consumption. The lower demand in industrial usage and
synthetic fuels compared to that in 2012 was offset by increased demand in the electricity sector and the
merchants and domestic sector.
Coal continued to be the leading revenue earner accounting for R101.38 billion of the total mining revenue.
Local sales value surged 12.9 percent from R43.9 billion to R49.6 billion owing to a higher unit value in
2013. Export sales, which earn the mining companies higher margins, recorded a decrease of 0.8 percent
to R51.8 billion in 2013 from R52.6 billion in 2012 mainly due to lower sales volumes.
MAJOR DEVELOPMENTS IN 2012/2013
Australian and Johannesburg-listed coal development firm Resource Generation (ResGen) raised US$21
million for its Boikarabelo project in South Africa‟s Limpopo province after issuing debentures to Asian
trading group, Noble Group. In addition to the future shares in the company, Noble also has the right to buy
3.0 Mtpa of coal from Boikarabelo Mine once production has commenced. Meanwhile the company began
construction at Boikarabelo Mine at the beginning of February 2013. Construction activities include site
infrastructure, roadworks, water and power connections. In July 2013, ResGen initiated the construction of
a 38 km rail line that would connect its Boikarabelo Mine to existing infrastructure owned by Transnet. The
rail line is seen as one of the lengthier tasks in establishing the mine. Boikarabelo Mine, a US$630 million
coal project is expected to produce 12 Mtpa ROM during its first phase, scaling up to 18 Mtpa by 2018.
0
20
40
60
80
100
120
Jan
-12
Feb
-12
Mar
-12
Ap
r-1
2
May
-12
Jun
-12
Jul-
12
Au
g-1
2
Sep
-12
Oct
-12
No
v-1
2
De
c-1
2
Jan
-13
Feb
-13
Mar
-13
Ap
r-1
3
May
-13
Jun
-13
Jul-
13
Au
g-1
3
Sep
-13
Oct
-13
No
v-1
3
De
c-1
3
Jan
-14
Feb
-14
Mar
-14
Ap
r-1
4
May
-14
Jun
-14
Pri
ce (
$/t
)+
Date
79
In another ResGen development, the company has signed a 20 year export off-take contract with Valu
Investments, an Indian firm that recently took shares in the company. The contract is for 1 Mtpa increasing
to 2 Mtpa when the second phase of Boikarabelo kicks off. This coal contract replaces a 0.5 Mt off-take
agreement with Bhushan Steel. Valu will also conduct feasibility studies for the development of a 200 MW
power plant and a larger 1 200 MW coal-fired power station both near Boikarabelo Mine. ResGen granted
Valu the right to own, build and operate both power stations as an independent power project (IPP).
Furthermore, ResGen, the company increased its shareholding in Waterberg One Coal (WOC) from 70
percent to 74 percent. The company will pay its Black Economic Empowerment (BEE) partner; Lukale
Mining R25 million in ResGen shares for the reduced shareholding in WOC to 26 percent. WOC‟s main
prospecting right of Waterberg One is contiguous to Boikarabelo mining project, whose mining right is
owned by Ledjadja Coal. In another transaction, a Singapore-based company, Blumont Group, agreed to
take up a 15 percent holding in ResGen. Blumont‟s investment in ResGen is between $20 million and $25
million.
In a mineral rights swap deal, Wescoal sold its Vlaklaagte farm to Xstrata for R81.1 million in return for
Xstrata‟s Elandspruit mineral right for which Wescoal paid R93.8 million. The transfer‟s effective date was
end of July 2013. Wescoal is aiming for an output of 4 Mtpa by 2015. Elandspruit has a 12-year life of mine
and hosts some 28 Mt of coal resource, enough to support production of 2.4 Mtpa.
The Department of Mineral Resources (DMR) executed a coal prospecting right allowing Ikwezi Mining to
explore the 3 998 ha Assegaai tenement in the Ermelo coalfield in Mpumalanga province. Based on that
company‟s management knowledge of the area together with historic borehole information, Ikwezi Mining
anticipates an exploration target of about 150 Mt of coal. Subsequently, Ikwezi Mining started exploration
work at Assegaai in the third quarter of 2013. Ikwezi Mining also holds 70 percent interest in the Ntendeka
colliery in the Kwazulu Natal coalfields along with a 60 percent of the Dundee, Arcon and Assegaai
projects. The Ntendeka colliery hosts a JORC compliant resource of about 221 Mt and an initial reserve of
14 Mt. Production is expected to run at 1.25 Mtpa. Ikwezi Mining was granted an Integrated Water Use
Licence (IWUL) by the South African government in March 2013.
In the third week of January 2013, the US$33 billion merger of Glencore and Xstrata was approved by the
competition authorities after uncertainty relating to coal supply to Eskom were resolved. Eskom and
Glencore reached a confidential agreement, which effectively protects supply of thermal coal to the
Hendrina, Majuba and Komati power stations. In an agreement with unions, the Competition Tribunal ruled
that only 80 skilled workers and 100 semi-skilled workers could be retrenched as a result of the merger. A
training fund, administered by a training committee, was also established by Glencore Xstrata.
Following the conclusions of negotiations with the National Union of Mineworkers (NUM) in December
2012, Johannesburg-listed South African Coal Mining Holdings (SACMH) suspended mining activities at its
Umlabu colliery. The colliery was put on a care and maintenance programme and the company retained
80
minimal workforce to maintain the coal processing plant, as well as to ensure that the rehabilitation process
proceeds and all environmental requirements and safety regulations were complied with.
In another development, Australian-listed coal development firm, Universal Coal was granted a mining right
by the DMR for its 74 percent-owned Roodekop export thermal coal project in Witbank in Mpumalanga
province. The project has already been granted a National Environmental Management authorization and
is still waiting for the water use and waste discharge licences. Resources at Roodekop are estimated at
82.8 Mt of which 67.2 Mt are measured and 15.6 Mt indicated.
Also, Universal Coal concluded a sales agreement with Eskom in March 2013 to supply 2 Mtpa of coal
from the company‟s Kangala project. The project was commissioned in the first quarter of 2014. This coal
supply agreement was a major step for Universal Coal as it assisted with the financing of the A$49 million
Kangala project.
A Johannesburg-listed firm, Village Main Reef (VMR) bought 19.9 percent of shares in ASX-listed South
African thermal coal producer Continental Coal. In terms of the deal, VMR will conduct a private placement
of 100 million shares for a total consideration of A$8 million, equal to a price of A$0.08 per Continental coal
share. According to Continental Coal, this was a milestone ahead the finalization of a strategic partnership
in the company‟s new project, De Wittekrans Thermal Coal. Furthermore, minority shareholders with
shares below A$500 were also bought out by VMR at a price of A$0.052 per share, Continental‟s share
price quoted on the ASX prior to 11 March 2013. Continental Coal expects to benefit from a reduction in
administrative costs and an improvement in efficiencies with managing a smaller shareholder base. In
addition, these minority shareholders will be afforded an opportunity to take advantage of a cost effective
and convenient way of selling their shares without incurring brokerage fees. The acquisition was formally
completed in April 2013. Continental Coal was awarded the De Wittekrans coal project mining right in
September 2013 by the DMR. The project is expected to produce 2.4 Mtpa of export thermal coal, primarily
for the Asian market.
In an effort to get coal off South Africa‟s roads, Eskom is busy with the construction of a 63 km railway line
that would ensure that nearly all of the coal supplied to its Majuba power station would be railed, by 2015.
This railway construction project, funded by the World Bank, is part of a much larger strategy by Eskom to
convert its coal supply transportation from road to rail. Other power stations that will benefit from this
strategy include Grootvlei, Camden and Komati.
In a regional development, South Africa‟s state-owned transport and logistics utility, Transnet, will extend
its investment in the Waterberg coalfields to include a rail link to Botswana and provide that country with
access to Richards Bay. The rail development would route coal from Botswana‟s Mmamabula coalfields to
Lephalale in the Waterberg and pass through Thabazimbi to Ogies after which it will connect to the
Richards Bay route. Transnet has targeted to link the Waterberg with Botswana by 2020. The company
anticipates that it will be able to transport 10 Mtpa to 20 Mtpa of export coal from Botswana to Richards
Bay in the next 10 to 15 years. This project is also part of a regional strategy by Transnet following a
81
similar cross-border agreement entered into in August 2012 with Mozambique and Swaziland that would
more than double coal and magnetite exports through Maputo totalling some 6 Mtpa. In both
developments, Transnet uses three regional networks, namely; the North West Corridor integrating
Botswana, Zimbabwe and Namibia; the North-South Corridor integrating Zambia, Zimbabwe, South Africa
and Democratic Republic of Congo; and the Maputo Corridor which integrates South Africa, Swaziland and
Maputo.
Meanwhile the DMR granted a mining right to Exceed Resources for its 70 percent owned Moabsvelden
thermal coal project, in the Witbank coalfield. The mine is forecast to have a life of mine of 14 years with
first production targeted for the last quarter of 2014.
Coal of Africa Limited (CoAL) mothballed its Mooiplaats colliery, citing difficult geological conditions, poor
productivity, weak coal prices and high logistics costs. The colliery racked up losses of just over R400
million over the last two financial years. The operation was placed on care and maintenance with section
189 process kicking off on the 4th June 2013. The colliery employed some 548 people, consisting of 290
employees and 258 contractors. The National Union of Mine Workers wanted the government to revoke
CoAL‟s licence for the mine, arguing that another company should be able to use the licence and keep the
site operating.
In August 2013, CoAL was granted an environmental permit by the government for Makhado, a coking coal
project in Limpopo province. The detailed feasibility study of the Makhado project estimates initial ROM
output of 12.6 Mtpa yielding sales of 2.3 Mtpa of hard coking coal and 3.2 Mtpa of thermal coal. This mine
would cost about $400 million to build. Mine construction had not commenced at the time of writing.
Taking advantage of the opportunities provided from current regulatory developments in South Africa‟s
minerals and energy sectors, Exxaro Resources plans to build a 600 MW power station in a joint venture
with France‟s GDF SUEZ. Exxaro Resources plans to supply the venture with 3.8 Mtpa of coal from its
proposed Thabametsi mine project. The projects will be located in the Limpopo province; with the power
station situated 17 km North West of Lephalale, adjacent to Grootegeluk Mine, in the Waterberg coalfield.
According to Exxaro Resources, the power station could be scaled up to 1 200 MW. Coal from Thabametsi
would be transported by surface conveyor belt to the power station. Exxaro Resources also indicated that a
conventional truck and shovel method of operation would be used for mining. The duration of coal supply
would be determined by the duration of the power supply agreement although it is anticipated to be 25
years.
The Waterberg joint venture partners, ASX-listed Firestone Energy and Sekoko Resources continued with
their definitive feasibility study (DFS) on the proposed development of an opencast mining operation that is
anticipated to produce 10 Mtpa of coal. The first stage of the project, located in the Limpopo Province, is to
develop the Smitspan thermal coal mine which is committed under a MoU to supply power utility Eskom for
an initial term of 30 years. Based on discussions and arrangements and, subject to confirmation of funds,
82
project start-up and pre-production works commenced in January 2014, and coal production is expected to
commence in the second half of 2015.
In October 2013, Australian-listed Waterberg Coal Company (WCC) acquired 45.88 percent shares of
dual-listed Firestone Energy. Through this acquisition WCC also gained 480 million Firestone Energy
shares from its 25 percent-owned subsidiary Sekoko Resources, representing a further 13.52 percent
interest in Firestone Energy.
In December 2013, Transnet freight Rail (TFR) announced that it has ramped up the coal line from
Mpumalanga to RBCT from 71 Mtpa to 75 Mtpa. This was achieved through the commissioning of TFR‟s
200-wagon Shongololo train system which by-passes the Ermelo yard and thereby reducing the circle
times of locomotives and wagons. Trains were also increased from four per day to eight per day. TFR aims
to reach its target of 81 Mtpa by 2015.
Eskom estimates that between 2014 and 2040, it would require 4 Billion tons (Bt) of coal, of which 1.97 Bt
had been contracted while a further 2.1 Bt is still to be secured. The significant volumes of coal that Eskom
has to secure for the long term, providing an increasing opportunity for the Junior coal mining companies to
collaborate with each other as well as with Eskom, to further develop the mining sector of South Africa and
also improve the security of supply from the Mpumalanga and the Waterberg coal fields. Table 33 lists
some coal projects that have been in development over the past five years. Some of the projects, such as
the Penumbra are already in production stage, whereas others are still in their feasibility studies phase or
are currently under construction.
83
TABLE 33: SOME OF THE COAL MINES PROJECTS IN THE PAST FIVE YEARS
Source: Creamer Research Channel online and DMR Mineral Economics D2 data collection:
Nature of
InvestmentProject Name Company
Value of
investment
Project
timeline
Full
Production /
Mtpa
Employment
ImplicationsStatus of project
Life of
mine
/Years
BD Grootegeluk Mine R10.2 billion 2009 - 2016 14.6 5000 97 % complete 55
ND Thabametsi Mine ns 2012 - 2025 19.8 970 Pre-feasibility 30
ND Belfast Coal Project R3.8 billion H2 2017 2.7 ns Approved ns
ND New LargoAnglo American
Inyosi Coal
R16 billion to
R20 billion2017 11 ns
Feasibility study
completed in
2012
40
ND PenumbraContinental
Coal LtdR351-million 2012 0.75 198
Fully Operational
(5 November
2013)
11
ND De Wittekrans R355 million 2013 - 2015 3.8 1 200 Feasibility 30
ND Leiden R22.5 million 3 years 0.8 200 Pre-feasibility 10
NDBoikarabelo Coal
Mine
Resource
Generation$630-million
Q1 2013 -
Q1 201614 (rom) 1092
Contruction in
progress20 - 100
BD Vele Coal Mine R450-million Q4 2015
Production of
1 Mt at the
start. Mine will
ramp up to
produce 5Mt.
ns
Operation
stopped to carry
on with Phase 2
16
GDMakhado Coal
ProjectR3.96 billion ns 12.6 (ROM) 1106
granted
Environmental
Authorization
16
GDImpumelelo Coal
MineR4.65 billion Q4 2014 8.5 On schedule 35
BDThubelisha Coal
MineR3.39 billion 2012 10.6
Operating since
May 201225
GD Shondoni Colliery R5.46 billion 2015 9.5Just been
approved20
GDMbila Anthracite
Coal Project
Zyl and Mbila
ResourcesA$85 million Q2 2014 0.84 ns
Bankable
feasibility Study12
GDKangala Thermal
Coal ProjectUniversal Coal A$46.8-million Q1 2014 2.4 Mt (ROM) ns
Production
started in
February 2014
8.5
GD Moabsvelden
thermal coal projectXceed ResourcesR266-million mid 2014
0.25 (ROM
per month)ns ns 14
GDWaterberg Coal
Project
Firestone
Energy (60%)
and Sekoko
Resources
(40%)
R10 billion Q4 2015 10
2000
(construction)
1500 thereafter
Definitive
Feasibilty Study100
GDWonderfontein
Coal Project
GlencoreXstrat
a and Umcebo$95 million Q2 2014
3.6 (ROM),
2.5 Saleablens ns
BD
Tweefontein
Optimisation
Project
GlencoreXstrat
aR8.2 billion Q4 2014 7 Mt ns
In November
2013, 58%
complete
24
GD Argent CollieryDialstat Trading
115 (Pty) LtdR500 million 2016 2.4 Mt 350
Awaiting
Regulatory
Approvals
12
GD Manungu Colliery Tshedza R400 million Apr-15 1.6 Mt 250Contruction
phase14
Sasol Mining 4000
Projects that are in conceptual, pre-feasibility and feasibility stages are not listed as they don't have most of the information. The jobs do not
include the ones created during the construction of the project (and they are estimations). ND = New Development, GD= Greenfield
Development, BD = Brownfield Development, ns = not statetd, rom = run of mine
Coal of Africa
Ltd
Exxaro
Resources
Continental
Coal Ltd
84
There are other projects by different mining companies that are not yet approved. However, the projects
listed in Table 33 will play an important role in the security of coal supply for the country‟s electricity
generation in the medium term. The GMEP and New Largo are crucial because they will ensure that the
new power stations; Medupi and Kusile, have the required coal supply for the next 30 to 40 years. Of
significance, will be the development of the projects in Limpopo‟s Waterberg and Soutpansberg Coalfields.
Resource Generation‟s Boikarabelo Coal mine and the Waterberg Joint Venture project between Sekoko
Resources and Firestone Energy are the other two major projects that will open up the Waterberg coalfield.
The projects will also play an important role in achieving some of the National Development Plan‟s
objectives including; fighting inequality and poverty, and job creation.
EMPLOYMENT
In 2013, the number of employees in the coal sector grew by 11.7 to 87 768 accounting for 17.2 percent of
the country‟s 510 099 mining workforce, owing to new coal mines and projects that were still under
development. Male workers accounted for 90 percent of total employment in the coal sector whereas
female workers accounted for 10 percent.
TABLE 34: EMPLOYMENT IN THE COAL SECTOR, 2004 – 2013
Year Average number of employees Earnings - R1 000
Total Males Females Total Males Females
2004 50 327 48 106 2 221 5 863 461 5 582 370 281 091
2005 56 971 54 501 2 470 6 481 823 6 155 962 325 861
2006 57 778 54 933 2 845 7 269 836 6 854 933 414 902
2007 60 439 56 582 3 857 8 692 014 8 107 180 584 834
2008 65 484 60 804 4 680 1 1020 687 10 194 389 826 298
2009 70 791 65 227 5 564 12 815 351 11 717 347 1 098 004
2010 74 025 67 348 6 677 14 186 482 12 803 317 1 383 166
2011 78 580 71 545 7 035 16 094 850 14 523 209 1 571 641
2012 78 579 71 542 7 037 16 039 447 14 469 109 1 570 338
2013 87 768 79 020 8 748 18 864 018 16 776 492 2 087 526
Source: DMR, Mineral Economics Directorate
Correspondingly, earnings in this sector surged by 17.6 percent to R18.9 billion compared with R16 billion
in 2012. The average per capita earnings was R214 930, which was 8.75 percent more than the mining
industry‟s per capita of R197 632.
85
OUTLOOK
According to the World Coal publication, 2013 was a disappointing year for much of the global coal
industry. The downward trend in prices that began in mid-2011 continued through to 2013 exacerbated by
the excessive rapid growth on the coal supply side. It further asserts that in 2014, there will be producer
consolidation leading to unchanged global developments that will inevitably lead to significantly greater
coal consumption. The main driver of this trend is the constantly rising demand for electricity, as power is
expected to remain the basis for civilization and progress. Globally, an estimated 280 GW coal-fired power
plants are under construction and, an additional 190 GW coal-fired power plant are planned, all by 2017.
Even if some of these power plants will replace existing capacities, it can be assumed that coal
consumption will increase in 2014. The greatest increase will be in India and China where, by 2017, power
plants with approximately 210 GW will become operational.
South Africa‟s domestic coal demand is expected to rise in 2014 due to the increased demand from power
generation as Eskom commissioned the first unit of Medupi power station in the second half of 2014. This
unit is due to be connected to the power grid in December 2014. South Africa‟s coal production grew at a
marginal average growth rate of one percent over the past 10 years. It is against this background and the
additional production from new coal mines that, South Africa‟s coal production is forecast to step-up by
about one percent to reach 259 Mt in 2014. Domestic coal prices are expected to increase to an average of
R237 /t in 2014, owing to the stronger demand from the electricity sector. The country‟s coal exports are
expected to reach 77 Mt, driven mainly by India and China. Richards Bay FOB coal prices are forecast to
remain subdued in 2014, averaging about $77 /t, due to excess coal in the global market.
REFERENCES
1. BP Statistical Review of World Energy, June 2014
2. www.globalCoal.com
3. South African Coal Report, Various 2013 issues.
4. Lars Shernikau,2014: A year of consolidation, in World Coal published on 18/02/2014
5. Coal Information 2014, International Energy Agency – OECD/IEA
6. http://www.waterbergcoal.com.au/WaterbergProject.html
7. http://www.miningweekly.com/article/waterbergs-firestone-energy-takeover-closes-2013-10-11
86
HYDROCARBON FUELS
Lerato Ramane
SUPPLY – DEMAND
World proven oil reserves increased by 1.14 percent to 1 687.9 billion barrels (bbl) in 2013 compared with
1 668.9 bbl in 2012 (Table 35). The Organisation of Petroleum Exporting Countries (OPEC) accounted for
71.9 percent of the world‟s oil reserves. Venezuela had the largest global oil reserves accounting for 17.7
percent, followed by Saudi Arabia‟s 15.8 percent and Canada‟s 10.3 percent.
87
TABLE 35 – WORLD RESERVES AND PRODUCTION OF OIL AND NATURAL GAS, 2013
PROVED RESERVES PRODUCTION
OIL GAS OIL GAS
(bbl x109) % (m
3 x 10
12) % (1000 bbl/d) % (m
3 x 10
9) %
OPEC COUNTRIES
Algeria 12.2 0.7 4.5 2.4 1 575 1.8 78.6 2.3
Angola 12.7 0.8 # 0.0 1 801 2.1 # 0.0
Ecuador 8.2 0.5 # 0.0 527 0.6 # 0.0
Iran 157.0 9.3 33.8 18.2 3 558 4.1 166.6 4.9
Iraq 150.0 8.9 3.6 1.9 3 141 3.6 0.6 0.0
Kuwait 101.5 6.0 1.8 1.0 3 126 3.6 15.6 0.5
Libya 48.5 2.9 1.5 0.8 988 1.1 12.0 0.4
Nigeria 37.1 2.2 5.1 2.7 2 322 2.7 36.1 1.1
Qatar 25.1 1.5 24.7 13.3 1 995 2.3 158.5 4.7
Saudi Arabia 265.9 15.8 8.2 4.4 11 525 13.3 103.0 3.0
United Arab
Emirates(UAE) 97.8 5.8 6.1 3.3 3 646 4.2 56.0 1.7
Venezuela 298.3 17.7 5.6 3.0 2 623 3.0 28.4 0.8
Subtotal 1 214.3 71.9 94.8 51.1 36 827 42.4 655.4 19.3
OTHER SELECTED COUNTRIES
Argentina 2.4 0.1 0.3 0.2 656 0.8 35.5 1.0
Australia 4.0 0.2 3.7 2.0 416 0.5 42.9 1.3
Brazil 15.6 0.9 0.5 0.2 2 114 2.4 21.3 0.6
Brunei 1.1 0.1 0.3 0.2 135 0.2 12.2 0.4
Canada 174.3 10.3 2.0 1.1 3 948 4.5 154.8 4.6
China 18.1 1.1 3.3 1.8 4 180 4.8 117.1 3.5
Europe and Eurasia (EE) 147.8 8.8 56.6 30.5 17 281 19.9 1 053.6 31.1
India 5.7 0.3 1.4 0.8 894 1.0 33.7 1.0
Malaysia 3.7 0.2 1.1 0.6 657 0.8 69.1 2.0
Mexico 11.1 0.7 0.3 0.2 2 875 3.3 56.6 1.7
Oman 5.5 0.3 0.9 0.5 942 1.1 30.9 0.9
United States of America
(USA) 44.2 2.6 9.3 5.0 10 003 11.5 687.6 20.3
Other 40.1 2.4 11.2 6.0 5 880 6.8 419.8 12.4
Subtotal 473.6 28.1 90.9 48.9 49 981 57.6 2 735.1 80.7
TOTAL 1 687.9 100.0 185.7 100 86 808 100 3 390.5 100
Source: BP Statistical Review of World Energy, June 2014
Notes: + Includes crude oil, shale oil, oil sands and natural gas liquids and excludes liquid fuels derived from other sources such
as coal
* Excludes gas flared or recycled
# Figure not available
88
Global oil production rose by 0.6 percent to 86.81 million barrels per day (mbl/d) in 2013, compared with
86.15 mbl/d in 2012. Saudi Arabia, at 13.3 percent remained the world‟s largest oil producer, followed by
EE‟s 19.9 percent and USA‟s 11.5 percent. The USA, at 13.5 percent, recorded the largest growth globally.
Increases in Canada and Russia offset declines in Syria, the United Kingdom, Norway and Australia.
Africa‟s output fell by 5.7 percent as a result of a drop in production from both Libya (34.5 percent) and
Nigeria (4 percent).
South Africa‟s proven crude oil reserves amounted to 15 mbl in 2013 and are located offshore in the
Bredasdorp Basin and off the west coast of the country near the maritime border with Namibia. In 2013,
South Africa‟s crude petroleum production declined by 59.50 percent to 138 928 barrels (bl) compared with
343 072 bl in 2012. The decline can be attributed to maintenance stoppages which started in April 2013.
South Africa refines approximately 690 000 bbl/d of crude oil, and has the second largest refining capacity
in Africa surpassed only by Egypt (726 250 bbl/d). Major refineries include Sapref (169 000 bbl/d) and
Enref (118 000 bbl/d) in Durban, Chevref (110 000 bbl/d) in Cape Town, and Natref (88 000 bbl/d) in
Sasolburg. Including, the country‟s two synfuels facilities, i.e.; Sasol (160 000 bbl/d) which uses the coal to
liquid fuels technology and PetroSA (45 000 bbl/d) which uses the gas to liquid fuels technology.
The world‟s proven gas reserves decreased to 185.7 trillion m3 in 2013, compared with 187.3 trillion m
3 in
2012. At 30.5 percent, Europe and Eurasia (EE) had the largest reserves in the world, followed by Iran‟s
18.2 percent and Qatar‟s 13.3 percent. Global natural gas production rose by 1.1 percent to 3 390 billion
m3, compared with 3 33.9 billion m
3, despite volumetric declines in Nigeria (16.4 percent), India (16.3
percent), and Norway (5 percent). Growth was below average in most regions except EE. The USA, at
20.3 percent, remained the world‟s leading producer, followed by Iran‟s 4.9 percent and Canada‟s 4.6
percent.
South Africa has very limited proven natural gas reserves, but potentially large shale gas resources. The
country‟s natural gas production dropped to 0.66 Mt in 2013 compared with 0.98 Mt in 2012, while natural
gas condensate output amounted to 61.2 kt from 89.3 kt in the same period, due to lack of recovery from
the wells.
Global primary energy consumption increased by 2.3 percent in 2013, Qatar recorded the largest increase
at 9.5 percent followed by Portugal‟s 7.3 percent and Denmark‟s 5.3 percent. China, at 22.4 percent, was
still the largest consumer of energy followed by the USA‟s 17.8 percent. Africa‟s energy consumption was
still the lowest at 3.2 percent. Oil and natural gas contributed 56.6 percent of the fuels required for energy
production.
Global oil consumption grew by 1.4 percent to 91.33 mbl\d in 2013, compared with 89.77 mbl\d. The USA
at 19.9 percent remained the largest consumer of oil, followed by China‟s 12.1 percent and Japan‟s 5
percent. The USA (400 000 bl/d) recorded the largest growth to global oil consumption in 2013,
outperforming China‟s growth (390 000 bl/d) for the first time since 1999.
89
World natural gas consumption grew by 1.4 percent to 3 347.6 billion m3
in 2013, compared with 3 314.4
billion m3 in 2012. Growth was below average in every region except North America. China, at 10.8
percent, and the USA at 2.4 percent recorded the largest growth in the world. Globally, natural gas
accounted for 23.7 percent of primary energy consumption.
In South Africa, crude oil and natural gas are used for the production of liquid fuels (diesel, petrol, jet fuel
etc.). About 64 percent of oil produced in the country is used to meet the liquid fuels demand. While the
balance (34 percent) is met by synthetic fuels (synfuels), which are produced locally, largely from coal and
from natural gas.
PRICES AND REVENUES
The Brent crude oil price continued to rise from 2011 where it averaged $110.95/bbl. This upsurge in price
was due to supply shortages as a result of disruptions in Libya and other major oil producing countries in
the Middle East. The price continued to rise in 2012, reaching an annual average of $111.96/bb, as a result
of the lack of Iranian production. However in 2013, the average oil price dropped to $108.85/bbl, attributed
to the rise in global oil production. Prices declined further in the first quarter of 2014, reaching $107.41/bbl
in March but recovered to $109.68/bbl in May (Fig.1). High levels of Chinese crude oil imports in recent
months and the ongoing tensions in Libya and Ukraine contributed to the upward Brent crude oil price
swing.
FIGURE 28: MONTHLY AVERAGE BRENT CRUDE OIL PRICES, JANUARY 2011 – MAY 2014
Source: indexmundi (www.indexmundi.com)
The average price of crude petroleum in South Africa fell by 3.6 percent to R855/b in 2013, compared with
R887/b in 2012. The local sales revenue generated also declined by 43.5 percent to R164.8 million from
R291.5 million in the same period. This is attributed to the loss in oil production for the most part of 2013.
0
20
40
60
80
100
120
140
pri
ce (
$/b
l)
month
oil
90
The discovery of vast new resources of natural gas from shale formations and other unconventional
reservoirs have put pressure on the gas price for the past couple of years. Prices fell by 31 percent to
$2.75/ Million Metric British Thermal Unit (MMBtu) in 2012, compared with $3.99/ MMBtu in 2011 (Fig.2).
Prices began to rise in May 2012 and continued on that trend throughout 2013 reaching an average of
$3.72/ MMBtu, due to the colder than normal winter in the USA. Gas prices continued to rise in 2013,
peaking at $5.97/ MMBtu in February 2013 and then spiralling down to $4.57/ MMBtu in June of the same
year.
FIGURE 29: MONTHLY AVERAGE NATURAL GAS PRICES, JAN 2011 – JUNE 2014
Source: indexmundi (www.indexmundi.com)
In South Africa the average price for natural gas and natural gas condensate increased by 13.2 and 13
percent to R2 662/t and R11 520/t in 2013, compared with R2 351/t and R10 196/t in 2012, respectively.
However, natural gas condensate revenue fell by 22.5 percent to R705 million in 2013 from R910 million in
2012, due to a combination of factors including lower production and rand weakness.
EMPLOYMENT
The hydrocarbons industry in South Africa employed about 236 people in 2013, a decrease of 1.1 percent
compared to 2012 and only 9 percent of this workforce was female. The total payments declined by 2.6
percent in that period, due to the decline in production. Per capita earnings also fell by 1.5 percent as a
result (Table 36).
0
1
2
3
4
5
6
7
Jan
-11
Mar
-11
May
-11
Jul-
11
Sep
-11
No
v-1
1
Jan
-12
Mar
-12
May
-12
Jul-
12
Sep
-12
No
v-1
2
Jan
-13
Mar
-13
May
-13
Jul-
13
Sep
-13
No
v-1
3
Jan
-14
Mar
-14
May
-14
Pri
ce (
$/m
mb
tu)
Month
natural gas
91
TABLE 36: EMPLOYMENTS IN THE HYDROCARBONS SECTOR
YEAR TOTAL EMPLOYMENT TOTAL PAYMENTS PER CAITA EARNINGS
2012 239 135 349 521 566 316
2013 236 131 847 710 557 692
Change (%) -1.1 -2.6 -1.5
Source: DMR, Directorate Mineral Economics
DEVELOPMENTS
Project Ikhwezi is set to play an instrumental role in sustaining the life of the gas-to-liquids (GTL) refinery in
Mossel Bay. This project involves tapping into gas reserves in Petro SA‟s F-O field, which is located 40km
south-east of its F-A production platform off the south coast of South Africa. PetroSA has invested
R3.7 billion in Ikhwezi, which is expected to begin producing natural gas in June 2015. Drilling of wells that
form part of this project has already commenced and it has an estimated 1.3 trillion cubic feet of gas
reserves, enough to feed the refinery for about six years. The project will create temporary jobs during
construction and drilling. It is expected that the project will provide feedstock, which will prolong the life of
the GTL refinery, and maintain existing jobs at the GTL refinery.
Project Mthombo is one of PetroSA‟s key growth initiatives, which aims at addressing the supply gap in the
liquid fuels sector by building a world class refinery in the Coega Industrial Development Zone in the
Eastern Cape Province. The Presidential Infrastructure Coordinating Commission (PICC), a committee
tasked with implementing the National Infrastructure Plan, identified Project Mthombo as one of the
Strategic Integrated Projects aimed at driving economic development and service delivery in the Eastern
Cape. PetroSA and China Petrochemical Corporation, Sinopec, concluded a Joint Study Agreement (JSA),
where the two companies jointly developed a business case for Project Mthombo. The first phase of the
JSA saw the completion of pre-feasibility studies where the refinery configuration and capacity of 300 000
barrels per day were approved by both companies. The project is now gearing up for the second phase of
the JSA, which involves conducting a feasibility study to assess the viability of Coega refinery and its
related infrastructure. The feasibility study will also define the project scope, identify additional partners and
develop a more accurate cost estimate. The project is expected to create between 12 000 and 21 000
direct & indirect jobs during construction & between 2 000 & 5 000 when operational.
Another important landmark reached during the year under review was the signing of the Framework
Agreement between PetroSA and Sinopec in March 2013. The agreement paves the way for
co-operation beyond Project Mthombo, to include oil and gas exploration as well as the development and
production of projects in South Africa and surrounding countries. Other areas of co-operation include the
investigation of downstream opportunities in the Southern African region, as well as the development and
acquisition of storage and logistical infrastructure. This strategic partnership is expected to yield results that
will contribute positively towards achieving PetroSA‟s objectives of growth and sustainability.
92
The tariffs on refined product pipelines have been increased to finance the construction costs for a new
multi-fuel pipeline between Durban and Johannesburg, which will replace the existing ageing infrastructure
and increase pipeline capacity. The new fuel standards, coupled with the increase in pipeline tariffs, may
raise refiners' operational costs. However, most crude oil refineries have already began upgrading, ahead
of the implementation of these new Clean Fuel 2 (CF2) specifications.
Shell and BP are pursuing a multibillion-rand project to upgrade the Sapref refinery to produce fuels that
meet the incoming CF2 specifications. Additionally, Sasol estimated that it would need to invest R11.7-
billion at the Natref refinery and Sasol Synfuels, to comply with the CF2 specifications. The proposed
improvements by petroleum companies will cost a collective investment of about
R40 billion. These new specifications do not only provide environmental benefits but cleaner fuels are
necessary for modern fuel efficient cars, according to the automotive sector.
The South African government is confident that shale gas could be a significant „game changer‟ in terms of
South Africa‟s energy situation if the reserves are proved economic, and has assured anti-fracking
lobbyists that exploration will proceed in an environmentally and socially responsible manner. Furthermore,
the National Planning Commission recommended that exploratory drilling take place within the next five
years as part of the short-term steps that the National Development Plan 2030 (NDP) suggests, are
necessary to move South Africa to a diverse energy environment by 2030. The NDP asserts that this will
help determine whether economically recoverable shale gas reserves exist in the Karoo, while
environmental investigations will ascertain whether exploitation of the resource is environmentally
sustainable. Assuming reserves are proven and environmental concerns are alleviated, the NDP promotes
fast-tracking the development of the shale gas industry, as a result of its significant potential to contribute
to South Africa‟s energy needs.
OUTLOOK
The global economy remained fragile and highly uncertain during the 2013 financial year, weighed down by
escalating geopolitical tensions in the Middle East, the USA/EU economic sanctions against Iran over its
nuclear programme, and the persistent EU sovereign debt crisis. However, a measure of economic
recovery was seen in some parts of the world over the same period, mainly in the USA, Germany, India
and China.
According to the BP statistical energy outlook, primary energy demand is expected to increase by an
average of 1.5 percent per annum (p.a) from 2014 reaching 41 percent by 2035. The increasing energy
demand is a result of very high energy consumption growth, driven by the industrialization and
electrification of non-OECD economies, particularly China. Although the past decade recorded the largest
ever growth of energy consumption in volume terms over any ten year period, this is unlikely to be
surpassed in the medium to long term. There is a clear shift in energy growth from the OECD to the non-
OECD countries. Almost 95 percent of the projected growth is in the non-OECD, with energy consumption
93
growing at 2.3 percent annually in contrast to the OECD‟s 0.2 percent. However, India‟s contribution is
expected to grow faster, almost matching that of China in the next 10 years or so.
At 1.9 percent annually, gas is the fastest growing fossil fuel and the only one to grow more rapidly than
total energy while oil (0.8 percent p.a.) shows the slowest growth. However, worldwide oil supply is
expected to increase by 1.7 million bbl\d in 2014 with most of the growth coming from producers outside
the Organization of Petroleum Exporting Countries (OPEC). Non-OPEC production is expected to rise by
1.3 million bbl\d in 2014, with continued increased production from the USA and Canadian oil sands. North
America is estimated to account for two thirds of the projected growth for non-OPEC supply.
The escalating conflict in Iraq and high levels of Chinese crude oil imports in 2013, as well as ongoing
delays for Libyan oil exports have contributed to upward price pressures. The forecast Brent crude oil price
averages $110/bbl in 2014 and $105/bbl in 2015. According to the US Energy Information Administration
(EIA), natural gas prices are likely to remain near current levels until the start of the next winter. Natural
gas prices are expected to average $4.77/MMBtu in 2014 and $4.50/MMBtu in 2015.
Global demand for natural gas will grow by 1.9 percent p.a. from 2014 reaching 497 Bcf/d by 2035, mainly
due to growth in non-OECD. In the OECD, gas could become a dominant fuel by 2031, accounting for 31
percent in primary energy by 2035. However in the non-OECD, gas remains in third place, behind coal and
oil, with a 24 percent share of primary energy in the same period.
Global natural gas supply is expected to grow by 1.9 percent p.a. from 2014, reaching 497 Bcf/d by 2035.
At 6.5 percent, shale gas is the fastest growing source of gas, supplying nearly half of the growth in global
gas output. Gas supply growth is concentrated in the non-OECD accounting for 73 percent of global
growth. Almost 80 percent of non-OECD growth is from non-shale sources. Demand is expected to grow
the fastest in Asia and the Middle East. Significant increases in supply are expected from China and the
US.
Due to South Africa‟s diminishing reserves, crude oil production is likely to drop to approximately 100 000
bbl/y by 2015. Nonetheless, this decline could be offset by rising synthetic oil production, which is expected
to add more than 200 000 bbl\d and crude oil imports. South Africa‟s demand for crude oil is anticipated to
reach 600 000 bbl\d by 2021, with 300 000 bl/d coming from Project Mthombo. Consumption is expected to
rise steadily over this period in line with economic growth. Natural gas production is expected to increase in
2015, when PetroSA‟s project Ikhwezi is fully operational.
The potential benefits of a “gas boom” provides a major push for South Africa to encourage exploration for
and production of gas, to help create employment, boost the local energy market and grow the economy.
By 2030, the Integrated Resource Plan (IRP 2010) aims to have cut South Africa‟s overwhelming reliance
on coal, raising the contribution of nuclear, renewables and natural gas to the country‟s energy mix.
94
REFERENCES
1. BP Statistical Review of World Energy June 2014
2. Index mundi , www.indexmundi.com
3. Mineral Economics Directorate, DMR
4. PetroSA‟s annual report, 2013
5. US Energy Information Administration , price forecast: http://www.eia.gov/forecasts/steo/report/prices.cfm
6. US Energy Information Administration, country analysis: http://www.eia.gov/countries/analysisbriefs/South_africa/south_africa
95
URANIUM
Mpumzi Bonga
WORLD RESOURCES
World identified uranium resources, recoverable at $130/kg, were estimated at 5.5 MtU in 2013. Australia has
the world‟s largest known recoverable uranium resources accounting for 31 percent, followed by Kazakhstan‟s
12 percent and Canada‟s and Russia‟s 9 percent (Table ). South Africa, at 5.5 percent, is ranked 5th in the world
and hosts Africa‟s largest resources followed by Namibia and Niger.
TABLE 37: WORLD URANIUM RESOURCES AND PRODUCTION, 2011
COUNTRY
URANIUM RESOURCES* PRODUCTION+
RAR# Rank 2012 2013
(ktU) % (Mlb U) % Rank
Australia 1 673 31.0 1 18.3 16.3 10.7 3
Canada 485 9.0 3 23.4 24.3 15.9 2
Chinae 171 3.2 9 3.9 3.9 2.6 9
Namibia 284 5.3 6 10.7 11.2 7.0 4
Niger 272 5.0 7 11.8 10.4 6.8 5
Kazakhstan 651 12.0 2 55.5 58.5 38.2 1
Russia 480 8.9 4 7.5 8.2 5.4 6
South Africa 295 8 5 655 582 1.1 11
Ukrainee 105 1.9 11 2.5 2.4 1.6 10
USA 207 3.8 8 4.1 5.0 3.2 8
Uzbekistan 111 2.1 10 6.3 6.3 4.1 7
SUBTOTAL 5 093 - - 51 872 52 240 - -
Others 311 5.8
1 791 1 254
World Total 5 404 100
151.2 152.9 100
Sources: *OECD‟s NEA & IAEA, Uranium 2013: Resources, Production and Demand
+ World Nuclear Association, Market Report data, 2013
Notes: #Reasonably Assured Resources (RAR) plus Inferred Resources, to $130/kg U
e: Estimate
96
WORLD SUPPLY- DEMAND
World uranium mine production increased by 1.1 percent from 151.2 Mlb in 2012 to 15.9 million pounds U3O8 in
2013, (Table ). When combined with secondary sources, this figure rises to 206 million pounds U3O8. At 38.2
percent; Kazakhstan dominated word output, followed by Canada‟s 15.8 percent and Australia‟s 10.7 percent.
Together, these countries accounted for 64.8 percent of the global uranium output. Africa accounts for more
than 20 percent of world output. The continent‟s uranium production is dominated by Niger and Namibia,
respectively accounting for 6.8 percent and 7.0 percent of total world output, followed by Malawi and South
Africa at third and fourth place respectively. While uranium production rose in all the major uranium producing
countries in Africa, South Africa‟s continued to decline despite the country having the largest resources in the
continent.
South Africa produces uranium mainly as a by-product from gold mines, and this is exported by Anglo-
American‟s Nuclear Fuel Corporation (Nufcor) as uranium oxide (U3O8). The country‟s uranium output has been
trending downward owing to the persisting decline in gold output resulting from rising input costs and lower gold
prices..
Global uranium demand is mainly driven by nuclear power generation, which has been growing at an
accelerated rate driven by Climate Change concerns (Table 37). This nuclear power was generated from 434
nuclear reactors globally. The US, at 23 percent (100 reactors) has the highest number of reactors, followed by
France‟s 13 percent (58 reactors) and Japan‟s 11 percent (50 reactors). The US derived 19.4 percent of its
electricity from nuclear energy, while France and Japan drew 73.3 percent and 1.7 percent respectively. South
Africa generates 5.7 percent of its electricity from two nuclear reactors. Uranium consumed in nuclear energy
reactors was 65.9 kt in 2013 globally. During the same year, there were 71 reactors under construction while
173 were on order and 314 proposed. Locally, demand remained stagnant at 1800tU from the two reactors at
Koeberg. There are, however, plans afoot to raise nuclear energy contribution to the country‟s energy mix to 14
percent by 2023, which could raise the number of reactors by at least six. As efforts to exploit locally produced
vital input raw materials intensify, the local market could tighten and later swing into deficit if current output
levels are maintained.
97
TABLE 38: WORLD NUCLEAR POWER REACTORS AND URANIUM REQUIREMENTS, 2013-2014
COUNTRY
NUCLEAR
ELECTRICITY REACTORS URANIUM REACTORS URANIUM
GENERATION OPERABLE REQUIRED
2013
OPERABLE REQUIRED
2014 2013 2013 2014
billion kWh
% of
elec No MWe (t U) No MWe (t U)
USA 790.2 19.4 100 98 951 19 622 100 99361 18816
France 405.9 73.3 58 63 130 9 320 58 63130 9927
Japan 14.0 1.7 50 44 396 366 48 42569 2119
Germany 92.1 15.5 9 12 003 1 889 9 12003 1889
Korea (South) 132.5 27.6 23 20 787 4 218 23 20656 5002
Russia 161.7 17.5 33 24 253 5 090 33 24253 5456
UK 64.1 18.3 16 10 038 1 828 16 10038 1738
China 104.8 2.1 18 14 962 6 711 20 17055 6296
Spain 54.3 19.7 7 7 002 1 357 7 7 002 1274
Canada* 94.3 16.0 19 13 553 1 764 19 13553 1784
Sweden 63.7 42.7 10 9 508 1 505 10 9508 1516
Ukraine 78.2 43.6 15 13 168 2 352 15 13168 2 359
Belgium 52.1 40.6 7 5 943 1 017 7 5 943 1017
South Africa 13.6 5.7 2 1 830 305 2 1 830 305
SUBTOTAL 2 121.5
367 339 524 57 344 367 325 294 57 139
Others 237.5
67 34 533 7634 67 49 319 8 769
2 359 13.5 434 374 057 64 978 434 374 611 65 908 World
Notes:
% of elec: percent contribution to national electricity production
MWe: Megawatt net (electrical as distinct from thermal)
kWh: kilowatt-hour
* estimate
Sources: World Nuclear Association, 2013-14
98
PRICES
Uranium prices continued trending downward in 2014 as the average price for January 2014 amounted to
$42.75/lb, $10/lb lower than in January 2013. The decline continued in the second term, with prices
averaging $40/lb by June and deteriorated to $34.5/lb by July suppressed by more supplies brought to the
market. Although prices recovered to $36.5/lb in November, this quickly faded back to $34.5/lb by
December owing to continued market excess (Fig.1) and raising questions of whether this new plateau
accentuates the suspected similarities between the post Chernobyl and post Fukushima uranium market
behaviours. After the Chernobyl disaster, planned reactors were scratched globally, leading to inventories
build up. The entry of Russian and the CIS supplies together with the announcement of US intention to sell
about 90 Mlb of uranium exacerbated an already oversupplied market resulting in a downward spiral in
prices, which plateaued at around $10/lb. Prices remained suppressed at around the $10 mark until 2004
when prices started recovering encouraged by a series of production disruptions. Prices peaked at around
$137/lb, arrested by the onset of the US financial crisis in 2007, which precipitated the subsequent global
economic crisis.
Thereafter, a confluence of factors including availing of additional uranium supplies by the US and
investor funds intent on liquidating their uranium holdings, pulled prices down to $40/lb. Prices rallied to
$70/lb in 2010 on expectations of stronger demand from China. However, the Fukushima Daiichi accident
dampened demand as Japan announced its intention to close several plants and other nations, most
notably Germany, announced plans to phase nuclear energy out in favour of renewable energy. The
improvement of safety standards by IAEA saved the situation leading to more countries planning to build
more reactors while Japan was reported to be considering reopening the closed plants. The combination of
the afore-stated could conspire to exert an upward pressure on uranium prices, which seem to have
bottomed out.
FIGURE 30: AVERAGE MONTHLY SPOT URANIUM PRICES, 2011-2013
Source: Metal Bulletin
0
10
20
30
40
50
60
70
80
Pri
ce (
$/lb
)
Month-Year
99
DEVELOPMENTS IN AFRICA
Etango uranium project in Erongo, Namibia is reinterpreting the ore and waste boundaries to decide
whether more selective ore modeling will better represent the mining configuration adopted in the DFS as a
result of an internal review. A potential outcome of the greater selectivity may be a higher ore feed grade to
the processing plant. Environmental approval has been granted while the DFS has been lodged in support
of an existing mining license.
Langer Heinrich uranium mine expansion project, Erongo region Namibia,. is a 2.6-million-pound-a-year
uranium mine in the Namib desert, about 80 km east of Swakopmund, which was officially opened on
March 2007. Detailed designs for the tailings storage facility (TSF3) were completed during December
2012 and construction work started during this period.
Husab uranium project, near Swakopmund, Namibia has begun work with a groundbreaking ceremony at
the Husab project on April 18 2013. Swakop Uranium has been working on the construction and
development of the mine since the signing of the Engineering, Procurement and Construction Management
(EPCM) contract, in Beijing in November 2012. The contract was awarded to the Husab Project Joint
Venture (HPJV), which comprises several international engineering and project management companies
Norasa- Forsys Metals Corp. announced that it had completed an updated mineral resource estimate for it
Norasa project in Namibia. New measured resources amount to 103 Mlb at an average grade of 0.0197
percent U3O8 while inferred resources amount to 22 Mlb at an average grade of 0.0198 percent U3O8
SOUTH AFRICA
Peninsula Energy announced that it has completed the acquisition of ARSA held mineral properties that
form part of the Karoo uranium projects in the Western Cape The 36 prospecting rights comprise 5 600
km2 of uranium and molybdenum bearing sandstone channels in the Karoo basin. Over the last twelve
months, Peninsula has compiled a resource estimate, completed scoping studies on projects and recently
commenced a prefeasibility study on the project.
The DoE‟s recently released draft Integrated Energy Plan, which focuses on 2010 to 2050, for public
comment expects that South Africa‟s energy requirements, including electricity demand, will increase
significantly until 2050. Consequently, the country is targeting several energy sources to help boost
electricity generation capacity in coming years, with Independent Power Producer Procurement
Programme having gained traction. Further, despite many delays to the country‟s nuclear power ambitions
and the continuing downward trending uranium output, plans are still afoot to add six new nuclear power
stations, with a combined 9.6 GW of generating capacity, to the grid by 2030. The department asserts
further that nuclear power remains an affordable base-load energy option that is likely to help SA meet its
Copenhagen commitments. Various vendors are reported to be gearing their companies up to participate in
the country‟s nuclear expansion programme when the procurement process starts. Although concerns
100
have been raised about the affordability of the programme, the local economy could benefit immensely
from the localisation of the programme.
A number of companies are reported to be involved in uranium prospecting, exploration and mining. Cooke
uranium has agreed to sell its West Rand underground and surface operations to Sibanye Gold in
exchange for a 17 percent share in Sibanye. Meanwhile, Gold One announced its plans to undertake a
feasibility study to see if the recommissioning of the Cooke 4 plant to treat uranium bearing ore could
provide an opportunity to treat production from Cooke 1-4 shafts. Estimated Cooke 4 indicated uranium
resources amounted to 11.1 million pounds while inferred resources amounted to 11 million pounds.
Having bought Dominion Reefs‟ assets, Shiva Uranium, which resumed uranium mining in 2011 through
three underground shafts, extracts gold and uranium through an on-site plant with a monthly capacity of
250 kt. Peninsula Energy, an Australian company with prospecting rights in the Karoo announced that its
drilling programme along the Ryst Kuil channel turned up good results. The company‟s Jorg compliant
results in the area were estimated at 50.1Mlb with indicated resources of 15.7 Mlb. The company plans to
develop a conventional mining and milling operation by 2016/17.
West Wits Mining, which was formed to explore and evaluate gold and uranium in the Wits Basin, sold the
majority of its exploration leases for $9 million in 2012 in order to focus on its remaining South African
lease, namely the DRD and the Rand leases. Also, the Witwatersrand Consolidated Gold Resources is
reported to have 14 prospecting rights over 1 200 km2 area. The company continues to focus on De Bron
Merriespruit (DBM) and Bloemhof projects. These two projects, which produce uranium as a by-product
have a total indicated resources of 21.7 Mt and an inferred resources of 75.6 Mt
OUTLOOK
The Japanese government has decided to restart the reactors shut down after the Fukushima-Daiichi
accident upon issuance of new safety standards and approval of the safety of each unit. If this expectation
materialises, it is expected to have a significant positive impact on the uranium markets. This together with
the additional plants currently under construction could raise world uranium demand. All the major
producing countries are planning to raise uranium output, while several projects are expected to come on
stream resulting in higher world production between 2014 and 2015. When this is combined with the
supplies from secondary sources and other inventories, supplies could still exceed demand.
The World Nuclear Association (WNA) forecasts a 73 percent increase in power demand by 2035. World
uranium demand is expected to be about 180 Ml during the 2014. During the same period, primary
production is forecast to amount to 153Mlb while supplies from secondary sources including from US
government inventories, Russian government stockpiles, tails enrichment, enricher underfeeding as well as
mox and reprocessed uranium could amount to more than 30Mlb. Uranium market performance is less
likely to be coruscating owing to the expected supply excess and depressed prices. However, the WNA
expects demand to range between 240 and 260Mlb by 2020 while total supply is likely to be 200Mbl. The
101
71 reactors that are under construction are likely to contribute significantly to the anticipated higher
uranium demand in the short term while the 491 reactors that are currently proposed are likely to
significantly raise demand affecting the current market situation in the long term. Barring for any
unforeseen market vicissitudes, the afore-stated could absorb a significant amount of the current excess
resulting in 40-60Mbl market shortfall by 2020. However, poor knowledge of the inventories estimates
together with the timing of their release makes it difficult to determine the net impact of the behaviour of
supply and demand. When this is combined with the possibility of plant underfeeding resulting in lower feed
uranium requirements, the prediction of the impact of substitutability between technology and uranium gets
more complicated. Also, if the planned uranium mining projects materialise, the expected market deficit
could be short-lived, swinging the market back into tightness. The potential closure of NPPs from
Germany, which promised to phase nuclear energy out by 2022 and draw 80 percent of its energy
requirements from renewable sources by 2050 and the continuing decline of nuclear power in the US
owing to the cost competitiveness of the shale gas are likely to significantly moderate the expected
demand rise, swinging the market into excess.
Prices are expected to remain under sustained pressure from the market excess keeping them flat
throughout 2014. Some analysts believe that the planned restarting of Japan‟s nuclear plants could push
prices to or beyond $70/lb, particularly if those nations that had been differing uranium purchases return to
the market. However, the release of inventories from investment funds could pull prices down to about
$32/lb. While the expected further price decline to $30/lb will not aleotoric but caused by more aggressive
suppliers selling into the excessively oversupplied market not due to any epistemic reasons but desire to
reduce stockpiles. Owing to the ubiquitous presence of inventories, uranium mining projects could be put
on hold while certain operations could be closed. This could affect South Africa‟s projects that are currently
being developed and delay their operationalization. However, since the country has committed to expand
the role of nuclear energy in its energy mix, local demand is likely to significantly improve in the medium to
long term as the first reactor becomes operational by 2023. Local uranium demand could rise, particularly if
the country could insist on the consumption of locally produced uranium in the production of nuclear fuel.
As the drive for local value addition intensifies consistent with the Beneficiation Strategy, demand for
locally produced uranium is likely to rise thus reviving the local uranium mining sector. The growth of
downstream industries could help accelerate the re-industrialisation of the economy and job creation.
REFERENCES
1. Creamer Media, www.miningweekly.com
2. Department of Energy, IRP2010
3. Department of Energy, IEP 2010-2050
4. Engineering News
5. http:// www.wise-uranium.org
6. Metal Bulletin
7. Nuclear Energy Agency (NEA) and the International Atomic Energy Agency (IAEA)
8. Uranium investment news (http://uraniuminvestingnews.com )
9. World Nuclear Association, Information papers
10. World nuclear news
102
NON-FERROUS METALS AND MINERALS OVERVIEW
M Ikaneng and L Ramane
INTRODUCTION
South Africa hosts rich resources of non-ferrous minerals, some of which are rated amongst the largest in
the world. The country is the second biggest producer of titanium and zircon minerals in the world and is
ranked fourth and second, respectively, in terms of global reserves of these minerals. South Africa is also
the producer of copper, cobalt, nickel, lead, zinc and antimony. Titanium and zircon resources are found in
heavy mineral sands in Kwa-Zulu Natal, Eastern Cape and Western Cape. Copper is mainly mined in the
Palabora Complex in the Limpopo Province, with zirconium and nickel being produced as by-product. Lead
and zinc deposits associated with copper are mined near Aggeneys, Northern Cape. Nickel deposits are
mined in the Uitkomst Complex near Badplaas in the Mpumalanga Province. Antimony deposits are
located in the Limpopo Province. Cobalt, copper and nickel base metals are also produced as by-products
of platinum mining in the Bushveld Complex.
PRODUCTION AND SALES
In 2013, South Africa‟s production of primary non-ferrous metals and minerals, excluding titanium and
zircon, decreased by 0.8 percent to 207.7 kt compared with the previous year, primarily as a result of weak
global demand and declining ore grades (Table 39). Local and export sales volumes declined by 1.5 and
22.8 percent to 65.0 kt, and 134.5 kt, respectively. Total sales volume declined by 10.3 percent to 199.6 kt.
Local sales revenue rose by 3.1 percent to R5.3 billion, while export revenue increased by 9.6 percent to
R7.1 billion. Total sales revenue increased by 6.8 percent to R1billion.
South Africa‟s total production of non-ferrous metals and minerals (primary and processed), excluding
titanium and zircon minerals increased by 39.2 percent to 1 226 kt in 2013 when compared with 2012.
Total sales volumes excluding titanium and zircon minerals as well aluminium and zinc metals, declined by
10.3 percent to 199.6 kt and while associated revenues increased by 6.8 percent to R12.4 billion. Local
sales volumes decreased by 1.5 percent to 65.0 kt while exports volumes increased by 14.0 percent to
134.6kt. Local and export sales revenue increased by 3.1 percent and 9.6 percent to R5.3 billion and R7.1
billion, respectively.
103
TABLE 39: SOUTH AFRICAN PRODUCTION AND SALES OF NON-FERROUS METALS AND
MINERALS, 2012 AND 2013
COMMODITY
PRODUCTION LOCAL SALES (FOR) EXPORT SALES (FOB) TOTAL SALES
Year (t) (t) R'000 (t) R'000 (t) R'000
Antimony (mic)
2013 2 405 9 777 2 267 149 553 2 276 150 330
2012 3 066 38 1 974 2 600 183 435 2 638 185 409
Cobalt
2013 1 294 51 11 868 740 193 226 791 205 093
2012 1102 33 7 439 614 147 320 647 154 759
Copper
2013 80 821 56 039 4 056 792 26 239 1 761 82 278 5 817
2012 69 859 54 633 3 575 955 26 594 1 579 81 227 5 155
Lead
2013 41 848 0 0 37 816 683 219 37 816 683 219
2012 52 489 0 0 53 628 811 498 53 628 811 498
Nickel
2013 51 208 8 924 1 216 372 40 646 5 741 253 49 570 6 957 625
2012 45 945 11 308 1 539 962 35 507 4 892 384 46 815 6 432 346
Titanium minerals
2013 2 604 157 2 681 810 2 712 307 100 269 1 028 312 2 782 079 3 740 619
2012 2 800 678 2 621 524 2 315 424 95 508 1 450 750 2 717 032 3 766 174
Zinc (mic)
2013 30 145 0 0 26 881 335 687 26 881 335 678
2012 37 034 0 0 37 646 444 536 37 646 444 536
Zirconium minerals
2013 224 446 11 277 125 326 437 642 4 819 625 448 919 4 944 952
2012 367 190 7 014 132 761 213 656 4 008 161 220 670 4 140 922
Primary subtotals
2013 3 036 324 2 758 110 8 123 442 672 500 12 952 636 3 430 610 17 023 333
2012 3 377 363 2 694 550 7 573 515 465 753 11 939 663 3 160 303 15 940 799
Aluminium metal
2013 823 783 *** *** *** *** *** ***
2012 667 576 *** *** *** *** *** ***
Titanium slag
2013 *** *** *** *** *** *** ***
2012 *** *** *** *** *** *** ***
Zinc metal
2013 0 0 0 0 0 0 0
2012 3 425 3 744 63 845 0 0 3 744 000 63 845
Processed
subtotals
2013 823 783 *** *** *** *** *** ***
2012 671 001 *** *** *** *** *** ***
Non-Ferrous
Totals
2013 3 860 107 2 758 110 8 123 442 672 500 12 952 636 3 430 610 17 023 333
2012 4 048 364 2 694 550 7 573 515 465 753 11 939 663 3 160 303 15 940 799
Source: DMR, Directorate Mineral Economics
*** Withheld
PRICES
In 2013, most non-ferrous metals prices continued to experience a declining trend due to the fragile global
economy which is fuelled by the Euro zone debt woes, the slowing Chinese economy, excess supply, high
London Metal Exchange (LME) inventory levels and negative market sentiments.
In 2013, average annual nickel price dropped by 14.6 percent to $15 018/t when compared with 2011.
104
Zinc prices decreased by 2.1 percent to $1 912/t, aluminium prices fell by 8.6 percent to $1 849/t, copper
decreased by 7.8 percent to $7 336/t and cobalt decreased by 5.8 percent to $13.17/lb. Average lead
prices increased by 3.7 percent to $ 2 141/t.
EMPLOYMENT
Employment in the South African non-ferrous metals and minerals sector decreased by a marginal 0.2
percent to 15 535 in 2013 compared with 15 573 employees in 2012 (Table 40), following the unprotected
strike experienced in July 2013 and labour reallocation at Consolidated Murchison Mine. Total
remuneration fell by 13.6 percent to R3.6 billion due to lower employment and average remuneration per
person. Average remuneration per person fell by 13.3 percent to R231 028 from R266 598.
TABLE 40: SOUTH AFRICA‟S NON-FERROUS METALS AND MINERALS: EMPLOYMENT AND GROSS
REMUNERATION, 2009-2013
YEAR EMPLOYEES REMUNERATION
Number R'000 Per Capita Payments
2009 16 158 2 736 715 169 372
2010 15 805 3 573 415 226 094
2011 16 027 4 303 902 268 540
2012 15 573 4 154 738 266 598
2013 15 535 3 589 019 231 028
Source: DMR, Directorate Mineral Economics
OUTLOOK
The global demand for nonferrous metals and minerals is expected to be gloomy in 2015, due to the
continued slowdown in China‟s economy and a weakening European economy. China accounts for more
than 40 percent of base metals consumption and is a significant producer of base metals. Tightened credit
condition and slowing investment in infrastructure which is a key metal consuming industry, contributed to
weaker metal consumption in China while weak manufacturing activity and low demand levels in Europe
continued to weigh down on base metals consumption. The economic growth rates in China and Europe
will lead to an uncertain outlook for base metals price recovery in 2015. Additionally, the strength of the US
dollar, market perceptions and other political events will continue to influence prices going forward. The
base metals industry is expected to stabilize over the next year, prohibiting further deterioration up to mid-
2016.
In South Africa, the production of nonferrous minerals is expected to increase slightly as labour relations
improves at several large-scale mines in the country, particularly in the PGM sector. Since nonferrous
minerals are mostly consumed in the construction and technology sectors, their demand will mostly be as a
result of the country‟s infrastructure development programme, which continues to create jobs and grow the
economy. Government is planning to spend R813.1 billion on infrastructure over the next three years.
105
Additionally, consumption of these minerals will further be boosted by governments‟ plan to increase local
value addition. In his 2015 state of the nation address, the president of the republic announced that
operation Phakisa will now be explored in the mining industry, where the private sector is expected to work
hand in hand with government to come up with a winning solution for beneficiation.
REFERENCES
1. Budget speech 2015, www.treasury.gov.za
2. Metal Bulletin, various articles
3. Metal-Pages, various articles
4. Mineral Economics Directorate, DMR
5. State of the Nation Address 2015
6. www.kitco.com
7. IMF, World Economic Outlook, http://www.imf.org, Oct 2013
8. Creamer Media‟s Base Metals Report – December 2014
106
ALUMINIUM
Mathabo Ikaneng
SUPPLY - DEMAND
According to the World Bureau of Metal Statistics (WBMS), world refined aluminium production rose by 3.5
percent to 47.5 Mt in 2013 compared with 2012 (Table 41), due to increased new capacity from China. At
47.7 percent, China remained the largest producer, followed by Russia‟s 7.8 percent and Canada‟s 6.2
percent. Refined aluminium output increased by 6.8 percent in Asia and 4.1 percent in Africa, driven by
robust growth in light-weighting of vehicles. Europe, Oceania and the Americas registered declines of 5.9
percent, 4.0 percent and 1.2 percent, respectively. South Africa contributed 1.7 percent and was ranked
10th in terms of global output. South Africa‟s aluminium production grew by 23.4 percent to 824 kt in 2013
compared with 668 kt in 2012.
TABLE 41: WORLD ALUMINIUM SMELTER CAPACITY, PRODUCTION AND EXPORTS, 2013
COUNTRY SMELTER
CAPACITY
PRODUCTION EXPORTS
kt kt % Rank kt % Rank
Australia 1 770 1 777 3.7 5 1 543 7.6 3
Bahrain 970 913 1.9 9 - -
Brazil 1 700 1 304 2.7 7 420 2.1 8
Canada 2 880 2 967 6.2 3 2 630 12.9 2
China 30 200 22 646 47.7 1 572 2.8 5
India 2700 1 571 3.3 6 385 1.9 9
Norway 1 230 1 202 2.5 8 1 254 6.1 4
Russia 4 450 3724 7.8 2 5 258 25.7 1
South Africa 900 824 1.7 10 528 2.6 6
USA 2 680 1 948 4.1 4 515 2.5 7
Other 12 420 8 630 18.2 7 324 35.9
TOTAL 2013 61 900 47 506 100 20 429 100
2012 55 900 45 900 21 144
Sources: United States Geological Survey, 2014
*Department of Mineral Resources (DMR), Directorate Mineral Economics
World Bureau of Metal Statistics 2014
World aluminium production fell by 1 percent in 2013. Regionally, production increased in Africa (10.3
percent) and the Gulf region (6.1 percent). Europe and Asia registered declines of 5.2 percent and 3.8
percent. Europe, at 30.6 percent continued to dominate world aluminium output, followed by the Americas‟
27.8 percent and Gulf Region‟s 15.8 percent.
107
FIGURE 31: WORLD REFINED ALUMINIUM PRODUCTION BY REGION, 2013
Source: WBMS, 2014
Global aluminium consumption increased by 1.2 percent to 46.5 Mt in 2013 (Fig. 2) compared with 46.0
Mt in 2012, fuelled by demand in the aerospace and transportation sectors. Growth in the transportation
sector is driven by EU‟s requirements for lighter fuel efficient vehicles in a bid to curb carbon dioxide
emissions. Since 2008, the production of aluminium is slightly more than consumption, mainly due to the
growing output coming out of Africa and Asia (Fig.2).
FIGURE 32: WORLD ALUMINIUM SUPPLY AND DEMAND 2006-2013
Source: CRU, 2014
Demand for refined aluminium was driven by the construction sector, which accounted for 27 percent of
total consumption, followed by the transport sector (23 percent) and the electrical sector (14 percent) as
depicted in Figure 32. Packaging sectors and consumer durables each consumed 12 percent while
machinery and equipment accounted for 7 percent.
Europe, 16.7%
Africa, 3.8%
Asia, 60.7%
Americas, 14.4%
Oceania, 4.4%
0
10
20
30
40
50
60
2006 2007 2008 2009 2010 2011 2012 2013
Mass (
Mt)
Production Consumption
108
FIGURE 33: INDUSTRIAL DEMAND FOR HIGH GRADE PRIMARY ALUMINIUM, 2013
Source: Alufer mining
TRADE
In 2013, world refined aluminium exports declined by 3.4 percent to 20.4 Mt compared with 2012. Russia‟s
exports, the world‟s largest exporter of aluminium, fell by 3.6 percent to 5.3 Mt. Canada‟s exports, the
second major exporter, surged by 9.6 percent to 2.6 Mt. South Africa‟s primary aluminium exports rose by
24.4 percent to 573 kt in 2013. South Africa exported 69.5 percent of refined aluminium produced and the
balance was consumed locally which indicates that the country still exports electricity and jobs, which is
inconsistent with current national objectives.
World aluminium imports declined by 0.6 percent to 20.7 Mt in 2013 compared with 2012. USA and
Germany dominated the world aluminium imports accounting for 14.0 percent 12.1 percent respectively.
South Africa‟s imports of beneficiated aluminium fell by 20.4 percent to 51.6 kt.
PRICES
Over the past three years, aluminium market forces have failed to drive supply rationing of the scale
needed to tighten fundamentals. This is evidenced by the subsequent downward trend in London Metal
Exchange (LME) cash settlement prices. During 2013, aluminium (LME) cash settlement prices declined by
8.6 percent to an annual average of $1 849.25/t compared with 2012 (Fig.4), as a result of consecutive
years market surplus and high inventory levels. The monthly average price of aluminium fell by 15.2
percent from $2 035.52/t in January to $1 767.63/t in Jul 2013. The average price rebounded to $1 814.76/t
in August, representing an increase of 2.7 percent before spiralling downward and settling at $1 738.78/t in
December. From January to June 2014, the price remained in a narrow range of between $1 726.48/t and
$1 836.40/t.
Construction, 27%
Transport, 23% Electrical/electronics, 14%
Packaging, 12%
Consumer durables, 12%
Machinery and equipment, 7%
Other, 5%
109
FIGURE 34: LONDON METAL EXCHANGE CASH SETTLEMENT PRICE (MONTHLY AVERAGES), 2012
TO 2014
Sources: Metal Bulletin, 2012-2014
South Africa‟s local and export unit sales surged by 9.4 percent and 12.7 percent to R19 178/t and R17
955/t in 2013 compared with 2012. As a result, local and export sales revenues increased by 28.8 percent
and 36.9 percent to R4.65 billion and R10.2 billion.
EMPLOYMENT
Total employment in South Africa‟s aluminium smelters decreased by 23.9 percent to 3 481 employees
compared with 4 576 in 2012, as a result of a 44.6 percent decline in contract employment, which offset the
12.3 percent increase in permanent employment (Table 42).
TABLE 42: EMPLOYMENT AND REMUNERATION IN SOUTH AFRICA‟S ALUMINIUM SMELTERS IN
2013
YEAR EMPLOYEE REMUNERATION PRODUCTION
Number R'000
Per Capita
Earnings
Labour Productivity
R‟000 t
2009 3 557 640 351 180 026 235
2010 3 652 1 168 219 319 885 222
2011 4 111 1 537 938 374 103 197
2012 4 576 1 761 178 384 873 146
2013 3 481 1 334 484 383 362 237
Sources: DMR, Directorate Mineral Economics
0
500
1000
1500
2000
2500
Pri
ce (
$/t
)
Month
110
Total remuneration fell by 24.2 percent to R1.33 billion due to a decrease in contractor earnings. Average
earnings declined by a 0.39 percent in 2013 indicative of the percentage contribution of contractor earning
to total remuneration. The 62 percent increase of employee productivity to 237 t/employee compared with
146 t/employee recorded in 2012 led to high total production.
RECENT DEVELOPMENTS
In January 2014, BHP Billiton announced the commencement of process to consult employees about the
proposed halting of aluminium smelting and associated services at the Bayside smelter in Richards Bay,
KwaZulu-Natal. The company acknowledged that it was the first time it has proposed the "closure" of the
smelter to employees. The closure will have significant implications for the downstream metals industry in
South Africa, including for the country‟s crucial automotive sector, a strategic industrial project of
government. The company‟s announcement came after Hulamin, a major aluminium manufacturer, put out
a cautionary notice stating it had entered into negotiations with BHP Billiton over the future of aluminium
slab supply from Bayside. BHP Billiton pronounced that to support the continuing supply of the metal to
local customers, the cast-house at Bayside will continue to operate with supply from Hillside, while the
company assesses its options. BHP Billiton undertook a review of Bayside, its oldest smelter in South
Africa, in September 2012 to explore various options to dispose of the operation because of low aluminium
prices, high operating costs and increasing production in China, as well as the continuing energy supply
challenges faced by industry in South Africa.
In August 2014, global resources group BHP Billiton announced plans to create an independent global
metals and mining company based on a selection of its high-quality aluminium, coal, manganese, nickel
and silver assets, including most of the assets in South Africa. BHP Billiton plans to create a new flexible
company that will seek growth opportunities in Southern Africa and elsewhere. The new entity, Newco, will
house BHP Billiton‟s aluminium and manganese businesses. These include aluminium smelters in South
Africa and Mozambique; the Cerro Matoso nickel business in Colombia; the thermal coal mines in South
Africa; and the Illawarra Metallurgical Coal and Cannington silver, lead and zinc mines in Australia. The
company is also considering the disposal of its Nickel West, New Mexico Coal and smaller petroleum
assets Newco headquarters will be based in Perth, Australia with a primary listing on the Australian Stock
Exchange (ASX) and an inward secondary listing on the Johannesburg Stock Exchange (JSE). However,
BHP Billiton will retain its JSE listing, and listings in London and Australia. Subject to final board approval
to proceed, shareholder approval and the receipt of satisfactory third party approvals, the demerger is
expected to be completed in the first half of the 2015 calendar year.
111
In November 2013, the London Metal Exchange (LME) board approved proposed changes to its
warehousing policy designed to cut queues at warehouses, following a three-month consultation with the
global metals industry. The LME has closely engaged with the FCA to ensure that the changes are
consistent with the LME‟s regulatory requirements. The metal exchange said it will attempt to challenge a
ruling in favour of United Co. Rusal, the world's largest aluminum producer, to block the planned reforms
the warehousing system designed to cut excessive delays to metal deliveries. The proposed warehouse
policy would affect all warehouses with queues of more than 50 days. The long delays to accessing metal
at LME warehouses have helped support aluminium prices in an otherwise oversupplied market. Ending
those delays could result in price declines, which would hurt producer companies.
OUTLOOK
BREE Resources and Energy Quarterly 2014, predicts an increase of 0.4 percent to total 48 Mt in global
aluminium production in 2014 and by a further 3.5 percent to 49.7 Mt in 2015, driven by the restart of idle
capacity from China‟s Xinfa Group‟s two Shanxi refineries Jiaokou Feimei Aluminium and Xinfa Chemical.
However, capacity reduction programmes implemented in response to lower prices, higher production
costs and market oversupply mainly in Europe are expected to offset the production increases in China in
2014. In 2015, production is forecast to increase in China in line with its 12th Five Year Plan targets and
remain steady in the United States, with restarts of curtailed capacity in Canada. Production growth in the
Middle East will also support the increase in world production.
The global demand for aluminium is experiencing strong growth, underpinned by the increase of the world
population along with a rapid development and urbanization of the developing countries. World aluminium
consumption is expected to increase by 4.2 percent to 48.1 Mt in 2014 and a further 3.3 percent 49.7 Mt in
2015. China is the key market expected to drive this growth increase, underpinned by forecast ongoing
expansion in the automotive and construction industries as well as other aluminium intensive consumer
items. Other consumption increases are expected from India driven by investment in infrastructure, the
US‟s improving economic conditions resulting in higher car production and construction activity and Europe
as its economic activities improve.
According to the South African Mining Report, the proposed warehousing policy aimed at reducing delivery
queues at warehouses at the London Metal Exchange (LME), presents a downside risk to the relatively
bearish price forecasts, particularly for aluminium. Aluminium prices are forecast to remain constrained in
2014 hovering around US$1 800/t mark due to market surpluses. This is particularly the case given the
potential impact of the reform of the LME warehouse system could have on the aluminium supply from
stockpiles in coming months.
South Africa‟s aluminium production is expected to be stagnant in 2013 due to low prices and high
electricity cost, but is expected to rise due to the anticipated Rosslyn expansion in the manufacture of
aluminium vehicles in the medium term.
112
REFERENCES
1. Department of Mineral Resources.
2. World Bureau of Metal Statistics Year Book, 2014
3. U.S Geological Survey, 2014. Mineral Commodity Summaries, January 2014: Internet website: http://www.usgs.gov
4. http://www.fastmarkets.com/base-metals/aluminium-analysis-forecast-q2-2014
5. BREE 2014, Resources and Energy Quarterly, June Quarter 2014
6. http://www.reuters.com/article/2013/07/09/us-alcoa-results-idUSBRE96710R20130709
7. http://www.dailymaverick.co.za/article/2013-05-06-termination-dispute-overloaded-the-staggering-cost-of-eskom-vs-bhp-
billiton/#.VGHYZ5VO7IV
8. http://www.bdlive.co.za/business/mining/2014/08/20/bhp-billiton-confirms-sale-plans-for-most-sa-assets
9. http://chamberofmines.org.za/news/article/82
10. http://www.lme.com
11. http://www.businessmonitor.com
113
ANTIMONY
Linda Maphango
SUPPLY - DEMAND
The US Geological Survey (USGS) estimated the world antimony reserves at 1.8 Mt in 2013. China‟s
reserves of about 950 kt remains the biggest in the world, followed by Russia (350 kt), Bolivia (310 kt),
Tajikistan (50 kt) and South Africa (27 kt). Global mine output of antimony decreased by 6.2 percent to 163
kt in 2013 when compared with the previous year, mainly due to production restrictions in China. At 130 kt,
China is still the major producer of antimony concentrate and accounted for about 79.6 percent of the
global supply, followed by Russia‟s 4.0 percent, Bolivia‟s 3.1 percent, Tajikistan‟s 2.9 percent and South
Africa‟s 1.5 percent.
TABLE 43: WORLD RESERVES AND PRODUCTION OF ANTIMONY CONCETRATES, 2013
COUNTRY RESERVE PRODUCTION
kt % Rank kt % Rank
Bolivia 310 16.9 3 5 3.1 3
China 950 51.7 1 130 79.7 1
Russia 350 19.0 2 6.5 4.0 2
South Africa 27 1.5 5 2.4 1.5 5
Tajikistan 50 2.7 4 4.7 2.9 4
Other 150 8.2 - 15.0 9.2 -
Total 2013 1 837 100.0
163.5 100.0
2012 1 837
174.3
Source: USGS, Mineral Commodity Summaries, January 2014
Developments in the Chinese antimony market continued to have an influence on the global antimony
market dynamics as China supplies and consumes most of the world‟s antimony. Hunan Province, the
largest antimony-producing province in China, embarked on a special action to inspect environmental
facilities of all antimony producers in the province, according to the local government of Hunan. This action
was carried out by the office of Environmental Protection of Hunan Province from March 2013 until the end
of the year. As a result, China‟s production declined by about 10.3 percent to 130 kt in 2013 when
compared with 2012. The inspections had an adverse effect on global supply as the province contributes
approximately 60 percent to global production.
In 2013, South Africa‟s production of antimony concentrate declined by 24.3 percent to 2 405 t when
compared with 2012. The decline in production is attributable to the introduction of trackless machinery as
well as infrastructure and equipment upgrades at Cons Murch Mine, the only producer of antimony in
South Africa. Village Main Reef owns 74 percent of the mine and the remaining 26 percent is held by the
Employee Share Trust. According to Village Main Reef, current operations at Cons Murch have a mine life
of about 11 year at current production rates.
114
Despite the drop in primary antimony supplies, world demand for antimony and antimony products was
muted in 2013, mainly due to softening demand from China and weak global economy which was suffering
from the hangover of the Eurozone debt crisis. In 2013, global consumption of primary antimony was
estimated at 160 kt per annum. According to China‟s official customs data, that country‟s imports of
antimony concentrate decreased by 3.3 percent to 66.3 kt in 2013 compared with the previous year. This
further explains the weakening demand from China, a country that consumes more than 50 percent of
global antimony supplies.
FIGURE 35: GLOBAL ANTIMONY CONSUMPTION BY SECTOR, 2013
Estimates from various sources
Property and automobile sectors were still the main drivers of global antimony consumption but their
demand for antimony was lacklustre for most part of 2013. Approximately 80 percent of antimony mined in
the world is used in the production of antimony trioxide, which is principally used in flame retardants as a
synergist (Fig. 1). The flame retardants sector contributed 52 percent to global primary antimony demand,
followed by lead-acid-batteries (25 percent), plastic catalysts & heat stabilisers (9 percent), glass and
ceramics (7 percent), and lead alloys (4 percent).
In 2013, global demand was also negatively affected by substitutes, following historically high prices in
preceding years. Dirk Rimaux of Campine, articulated the impact of substitution on demand for antimony at
the International Minor Metals Conference in London, indicating that consumption of antimony trioxide has
declined by about 25 to 30 percent from its historic level of approximately 130 kt per annum between 2010
and 2011. He also indicated that roof membrane, flooring and other consuming sectors switched out of
using antimony trioxide because of higher costs, to using zinc borate as a flame retardant and smoke
reduction additive. In recent years, demand for antimony in South Africa has been stagnant but it fell by 76
percent to only 9t in 2013.
Flame retardants, 52%
Lead-acid batteries, 25%
Plastic catalysts & heat stabilisers, 9%
Lead alloys, 4% Glass & ceramics, 7% Other, 3%
115
PRICES
During the first half of 2013, the price of antimony trended downwards but became volatile in the second
half (Fig. 2). The downward price trajectory was due to sustained weak demand from plastic and battery
producers, the major consumers of antimony, as well as lower domestic consumption in China. The
monthly average price of antimony fell by a compounded annual rate of 2.9 percent from $11 259/t in
January to $9 417/t in Jul 2013. The average price rebounded to $9 936/t and $10 550/t in August and
September, representing increases of 5.5 percent and 6.2 percent month-on-month, respectively.
FIGURE 36: ANTIMONY METAL BULLETIN, FREE MARKET PRICES, 2013 – 2014
Source: Metal Bulletin Free Market, 2013 – 2014
The price improved after China Minmetals, a government owned company, started buying up antimony
stocks from both Chinese and European warehouses in July 2013, as reported by Industrial Minerals. The
monthly average price remained almost unchanged in October before dipping and closing the year at $9
395/t in December 2013 as a result of soft demand in Europe and slower than expected economic activity
in China.
In January and February 2014, the price recovered to $9 705/t and $9 825/t and respectively, as
consumers replenished inventories. From February to July 2014, the price remained in a narrow range of
between $9 825/t and $9 520/t. According to recent market reports, the price growth of minerals used in
flame retardants, including antimony is slowing on the backdrop of softening demand growth from
electronics manufacturing and construction mainly in Asia. The yearly average price of antimony
decreased significantly by 23.5 percent from $12 786/t in 2012 to $10 347/t in 2013.
South Africa‟s local and export unit sales fell by 46.1 and 10.3 percent to R51 943/t and R70 552/t in 2013
compared with 2012. Despite the lower unit values, local sales revenues generated increased 104.6
8000.00
8500.00
9000.00
9500.00
10000.00
10500.00
11000.00
11500.00
Jan-1
3
Fe
b-1
3
Mar-
13
Apr-
13
May-1
3
Jun-1
3
Jul-13
Aug-1
3
Sep-1
3
Oct-
13
Nov-1
3
Dec-1
3
Jan-1
4
Fe
b-1
4
Mar-
14
Apr-
14
May-1
4
Jun-1
4
$/t
Months
116
percent to R1.97 million supported by higher sales volumes. However, both export volumes and revenue
fell by 3.7 and 13.6 percent to 2 600t and R183.4 million, respectively, due to weaker demand as a result of
weakening global economy.
EMPLOYMENT
Total employment in antimony sector fell 9.6 percent to 865 employees in 2013 compared with a 957
employees in 2012 due to retrenchment at Cons Murch Mine, resulting in a 2.1 percent decline in total
earnings to R129 million (Table 44).
TABLE 44: EMPLOYMENT AND REMUNERATION IN THE ANTIMONY SECTOR IN 2013
YEAR EMPLOYEE REMUNERATION
Number R'000 Per Capita Earnings
2010 942 91 630 97 272
2011 971 121 015 124 629
2012 957 131 687 137 604
2013 865 128 871 147 827
Sources: DMR, Directorate Mineral Economics
While female employment increased by 9.4 percent in 2013, the total female workforce constituted only 8.9
percent of the entire antimony sector employment. Per capita earnings increased by 7.4 percent in 2013
indicating an improvement of salary levels.
DEVELOPMENTS IN SOUTH AFRICA
Miners at Cons Murch Mine embarked on an unprotected strike for 10 days demanding either a lump sum
payout from an Employee Share Trust, or dividend payment as participants in the Trust. According to that
company, it was not yet in a position to pay dividends to all its shareholders, including the Employee Share
Trust, as a result of heavy capital investments and upgrades at the mine. In May 2014, Australian Stibium
Resources bought a 76.6 percent stake in Village Main Reef‟s Cons Murch antimony/gold mine for R150
million ($15 million). The remaining 23.4 percent is in the Cons Murch employee trust. Stibium Resources
will assume 49 percent ownership and management control of Cons Murch as part of the staged
acquisition of the 76.6 percent of the asset.
Stibium Resources will make an initial payment of $8.4 million to Village Main Reef upon getting regulatory
and shareholder approval. The remaining $6.6 million will be paid after the Minister of Mineral Resources
has given the green light on the transaction, in accordance with the Minerals and Petroleum Resources
Development Act (MPRDA). In terms of the sale agreement, Stibium Resources will also fund the first $2
million rehabilitation liability shortfall and Village Main Reef will pay the balance. Village Main Reef expects
117
the sale of the mine to be put to shareholder vote by the end of September 2014. Stibium plans to start
improving plant infrastructure, upgrading the trackless underground fleet and putting capital into
underground development to make more stope faces available at Cons Murch Mine as soon as it takes
charge of operations.
OUTLOOK
Demand is forecast to strengthen in 2014 and beyond, due to the anticipated improvement in the global
economy. According to Metal-Pages, producers are optimistic about the future prospects of the antimony
market and prices of antimony are expected to pick up in 2014. Producers‟ bullish outlook is premised on
the view that the market is likely to fall into a significant deficit due to rising consumption of fire-retardants
coupled with the dwindling Chinese resources. According to Metal-Pages, global demand for antimony is
projected to rise to about 250 kt by 2016. According to a study conducted by the US-based research firm,
Fredonia Group, global demand for flame retardant additives is forecast to grow by 6.1 percent per annum,
reaching 2.2 Mt tones by 2014.
Roskill‟s report predicts metallurgical markets to increase by 2 percent per annum fuelled by increasing use
of lead alloys in construction applications in emerging economies. The report also expects non-
metallurgical markets for antimony to rise by approximately 4 percent per annum through to 2016, mainly
driven by higher growth in flame retardants, plastic catalysts and heat stabilisers. However, lower growth in
ceramics and other uses is anticipated. New uses of antimony in solar panels and memory devices are
expected to support the growth of global demand for antimony in the future. These developments bode well
for South Africa‟s antimony industry as they have the potential to extend Cons Murch‟s life of mine. South
Africa‟s production of antimony is expected to increase in 2014, as production costs are reduced and
efficiencies improved during the year as the result of the new technology employed for extraction of the
mineral.
Freedonia Group predicts global demand for flame retardants additives to rise by 6.1 percent to 2.2 Mt in
2014. However, prices could be suppressed due to an exponential increase in the price of antimony during
the last 10 years, prompting consumers to switch to substitutes in a bid to cut costs.
National stockpiling and environmental inspection are expected to continue to restrict output of antimony in
China. Metal-Pages anticipates that long-term demand for antimony could rise as nanocrystal technology
has the potential to allow antimony metal to be used in the next generation of sodium-ion batteries in
smartphones, laptops and other portable electronic devices. China is contemplating introducing
compulsory standards for flame retardants which could boost world consumption of antimony and its price,
going forward. World consumption of antimony in flame retardants is expected to grow significantly in the
next couple of years as consumers increasingly demand safer products across the globe. Antimony prices
are expected to stabilise in 2014 and beyond. Global antimony demand hinges on the developments in
Chinese consumption on account benign demand in other countries.
118
REFERENCES:
1. Industrial Minerals‟ various publications, 2012 -2013.
2. Metal Bulletin, Prices, 2011 – 2012.
3. Metal-Pages‟ various publications, 2012 - 2013
4. U.S. Geological Survey, Mineral Commodity Summaries, Antimony 2013.
5. Roskill, “Antimony: Changes in the pattern of supply and demand”, April 2012, http://www.roskill.co.uk
6. Village Main Reef‟s various Media Releases, 2012 - 2013
119
COBALT
Lerato Ramane
SUPPLY - DEMAND
World cobalt reserves amounted to 7.2 Mt in 2013 (Table 45). The Democratic Republic of Congo (DRC) at
47.2 percent, still had the world‟s largest cobalt reserves, followed by Australia‟s 13.9 percent and Cuba‟s
6.9 percent. Globally, 57 percent of cobalt was derived from nickel mining, 37 percent sourced from copper
mining while; the balance was sourced from primary cobalt operations and other sources.
World cobalt mine production rose by 10.1 percent to 120 kt in 2013, compared with 109 kt in 2012 (Table
45), due to additional production from new projects and expansions of existing operations. The DRC was
the world‟s largest producer of cobalt accounting for 47.5 percent, followed by Canada‟s 6.7 percent and
China‟s 5.9 percent. South Africa, at 1.1 percent was ranked 11th.
TABLE 45: WORLD RESERVES AND MINE PRODUCTION OF COBALT, 2013
RESERVES MINE PRODUCTION
COUNTRY kt Percent Rank t Percent Rank
Australia 1 000 13.9 2 6 500 5.4 5
Brazil 89 1.2 8 3 900 3.3 8
Canada 260 3.6 5 8 000 6.7 2
China 80 1.1 9 7 100 5.9 3
Cuba 500 6.9 3 4 300 3.6 7
DRC 3 400 47.2 1 57 000 47.5 1
Morocco 18 0.3 10 2 100 1.8 10
New Caledonia 200 2.8 7 3 300 2.8 9
Russia 250 3.5 6 6 700 5.6 4
South Africa± * * * 1 294 1.1 11
Zambia 270 3.8 4 5 200 4.3 6
Other 1 133
14 606
TOTAL 2013 7 200
120 000
2012 7 500
109 000
Sources: USGS, January 2014
±DMR,
Mineral Economics Directorate (mine production)
*unknown
South Africa‟s cobalt is derived from nickel and platinum-group metals (PGMs) mining. Cobalt production
increased by 17.4 percent to 1 294 t in 2013, compared with 1 102 t in 2012 due to improved plant
recoveries and efficiencies (Table 46).
120
TABLE 46: SOUTH AFRICA‟S LOCAL AND EXPORT SALES OF COBALT, 2004-2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Value (FOR) Mass Value (FOR)
t t R‟ 000 R/t t R‟ 000 R/t
2004 309 19 5 671 306 310 83 232 269
2005 268 33 4 439 136 241 51 615 214
2006 267 44 8 882 200 221 46 975 213
2007 307 30 10 578 350 249 99 539 400
2008 244 43 26 231 608 261 167 774 642
2009 238 75 20 435 272 183 63 181 346
2010 840 58 16 110 278 493 135 424 275
2011 862 43 10 789 251 450 114 457 254
2012 1 102 33 7 439 227 614 147 320 240
2013 1 294 51 11 868 233 740 193 226 261
Source: Directorate Mineral Economics, DMR
In 2013, world refined cobalt production increased by 11.4 percent to 85.9 kt compared with 77.1kt 2012,
largely due to new capacity from Ambatovy production from Madagascar and a resurgent production from
China (Table 47). Higher production was recorded in Belgium (28.9 percent), China (21.1 percent), South
Africa (17.4 percent) and Norway (14.5 percent). China, at 42.0 percent, remained the largest global
refined cobalt producer, followed by Finland‟s 11.7 percent and Canada‟s 6.5 percent. The increase in
Chinese production indicated the recovery of that market following two years of weaker growth. Africa,
collectively contributed 14.8 percent to global output.
121
TABLE 47: REFINED COBALT PRODUCTION BY COUNTRY, 2012 AND 2013
COUNTRY 2012 2013
t t Rank
Australia 4 769 6.2 4 981 5.8 6
Belgium 4 200 5.4 5 415 6.3 4
Canada 5 682 7.4 5 559 6.5 3
China 29 784 38.6 36 062 42.0 1
D R of Congo 2 999 3.9 3 000 3.5 8
Finland 10 547 13.7 10 010 11.7 2
Japan 2 542 3.3 2 747 3.2 9
Madagascar 0 0.0 2 083 2.4 11
Morocco 1 214 1.6 1 353 1.6 12
Norway 2 969 3.9 3 400 4.0 7
Russia 2 186 2.8 2 368 2.8 10
South Africa* 1 102 1.4 1 294 1.5 13
Zambia 5 665 7.3 5 000 5.8 5
Other 3 432 4.5 2 632 3.1
TOTAL 77 091 100.0 85 904 100.0
Source: Cobalt News April 2014
*Mineral Economics Directorate, DMR
World cobalt demand increased by 4.4 percent in 2013; reaching an estimated 77.8 Mt, despite the
restrained levels seen in previous years. Growth from the rechargeable battery market was still the biggest
driver. At 42 percent, batteries were the largest consumer of cobalt, followed by superalloys (19 percent),
hard metals (9 percent), catalysts (9 percent) and others (21 percent) (Figure 37).
FIGURE 37: COBALT CONSUMPTION BY END USE, 2013
Source: Darton Commodities Ltd
Battery Chemicals 42%
Superalloys 19%
Hard metals 9%
Catalysts 9%
Ceramic/Pigments 7%
Magnets 4%
Tyres/Paint Dryers 3%
Others 7%
122
Approximately 94 percent of cobalt output in South Africa is exported, while only 6 percent is consumed
locally. However, local sales volumes rose by 55.5 percent to 51 t, compared with 33 t in 2012, due to
stronger demand from consuming markets (Table 46). Domestically, Cobalt is used for the manufacture of
alloys in the aircraft industry and in batteries. Sasol also uses cobalt as a catalyst for its gas-to-liquid
process.
PRICES
Recently, global cobalt production has been higher than consumption, resulting in a market surplus and a
downward pressure on prices. The cobalt price averaged $17.58/lb in 2011 and continued to fall reaching
an average of $13.97/lb in 2012. Prices improved slightly, reaching $14.52/lb in July 2013; but declined to
$12.24/lb by December of the same year (Figure 38).
A number of key factors contributed to the persistent weakness seen in cobalt prices in 2013. Demand
weakness, which kept the market in excess for three consecutive years undermined market performance.
The substitution of cobalt metal by intermediates or salts in the battery sector exacerbated the situation
further. Prices, which declined to $13.11/lb in January, reached $14.91/lb by March but dropped to
$14.02/lb May 2014.09.15
FIGURE 38: COBALT PRICE, 2011 – 2014
Sources: Metal Bulletin
Despite the falling global cobalt prices, South Africa‟s local and export unit sales values increased by 2.6
and 8.8 percent in 2013 to R233/t and R261/t, respectively. As a result , the local and export sales
revenues increased by 59.5 and 31.2 percent to R11.87 million and R193.2 million in 2013, respectively,
owing to higher sales volumes and unit sales values.
0.00
5.00
10.00
15.00
20.00
25.00
Jan-1
1
Mar-
11
May-1
1
Jul-11
Sep-1
1
Nov-1
1
Jan-1
2
Mar-
12
May-1
2
Jul-12
Sep-1
2
Nov-1
2
Jan-1
3
Mar-
13
May-1
3
Jul-13
Sep-1
3
Nov-1
3
Jan-1
4
Mar-
14
May-1
4
$\t
Period
price
123
DEVELOPMENTS
Of the additional supply seen in the cobalt industry, approximately 3 900 kt was produced from new
projects. The combined production from Madagascar‟s Ambatovy mine, Papua New Guinea‟s Ramu nickel
mine and Vale New Caledonia projects increased output as all three operations saw their first full year of
production during 2013.
Going forward other significant projects includes the following projects: Telferscot Resources Inc‟s Kolwezi
project located in Katanga Province in the Democratic Republic of Congo (DRC). It is located in an area
containing many active and past-productive copper-cobalt deposits, including some of the largest and
highest-grade deposits ever discovered. The Kolwezi Project includes four exploration permits covering
approximately 149 km2. Telferscot is actively pursuing additional projects in the Kolwezi area both by way
of joint venture and through direct acquisition from the government of the DRC.
Idaho Cobalt Project (ICP) is 100 percent owned by Formation Metals located in the state of Idaho in the
USA and aims to produce 1 500 Mt p/a of cobalt. This project comprises of the development of a mine and
construction of a concentrator and an electro winning plant. Construction commenced in early 2010 and
since then, construction activities have continued at the mine site and the refining complex. It managed to
keep critical construction activities going during 2012 utilizing cash on hand, meanwhile continuing to
pursue and raise additional capital to resume construction at full scale.
However, in May 2013, Formation Metals announced a decision to put this project on hold until market
conditions improve and further mine financing has been secured. Meanwhile Formation Metals is focusing
its activities on maintaining the project in good standing to ensure the retention of all developments and
mining permits. In order to raise additional capital, Formation Metals concluded the sale of its primary
asset, the Sunshine Precious Metals Refinery in September 2013, for $12 million. In combination with
additional austerity measures Formation aims to preserve cash so that it can revisit its flagship project
once market conditions improve and cobalt prices recover. On that note, Formation Metals' bankable
feasibility study was based on a cobalt price of more than $20/lb and, given the challenging market
conditions to attract funding for a primary cobalt project; commercial production from Idaho Cobalt Project
is not expected to come on stream in the short term.
The Boleo project is an advanced stage copper/cobalt/zinc/manganese development located in Baja
California Sur, Mexico. Baja Mining currently owns a 70 percent stake in the mine. The remaining stake is
held by a Korean syndicate of industrial companies including Korea Resources Corporation, LS-Nikko
Copper, Hyundai Hysco, SK Networks and Iljin Materials. The project is currently in the construction phase
which started in June 2011. Production was projected to begin by March 2014, but this has been put back
to the second half of the same year, partly due to labour shortages. The mine has an estimated life of 23
years and the project is now estimated to cost up to US$1.79 billion.
124
OUTLOOK
The cobalt market has been oversupplied since late 2009 and remains in surplus. According to Roskill, this
situation could continue throughout 2014 and 2015 as the ramping up of new projects and expansions
continues. Despite the potential for further new supply sources and expansion projects coming on stream,
demand is forecast to grow at a higher rate than supply. However, it could take several years to bring the
market back to equilibrium. This is likely to keep prices in check over the medium term.
Future demand for cobalt is expected to grow at more than 6 percent per annum until 2018; supported by
strong growth in China, the world‟s biggest refined cobalt producer. As a result, cobalt demand could
reach over 110 kt in that period. Demand for cobalt in battery applications is expected to drive
consumption growth and is forecast to grow at 9.2 percent per year.
Prices are expected to continue trending downwards in 2014 with the ramping up of new projects in
Madagascar and the Philippines, bringing additional material into the market and compounding the current
oversupply situation. Thereafter, prices are expected to rise year-on-year due to high grade cobalt prices
increasing at roughly 3.6 percent per annum to 2018.
South Africa‟s production of cobalt is expected to continue to rise, due to improved performances at the
Nkomati mine as well as the recovery in the platinum industry after 5 months of labour disruptions in the
first half of 2014. Exports of cobalt from South Africa have been rising since 2010 and will continue to grow
as demand eclipses supply in major consuming countries.
REFERENCES
1. African Rainbow Minerals (ARM), Interim results for the six months ended 31 December 2013
2. Darton Commodities Limited, Cobalt Market Review 2013-2014
3. Directorate Mineral Economics, DMR
4. http://www.idahocobalt.com/s/Home.asp
5. http://www.bnamericas.com/news/mining/start-of-copper-production-at-el-boleo-delayed-three-months-baja
6. Roskill 2014 report Leaflet, Cobalt: Market Outlook to 2018
7. Metal bulletin, prices
8. U.S. Geological Survey, Mineral Commodity Summaries, January 2014
125
COPPER
Silungiselelo Mnyameni
SUPPLY AND DEMAND
In 2013, global copper reserves were estimated at 680 Mt. Chile, at 27.9 percent, held the largest reserves,
followed by Australia (12.6 percent), Peru (11.2 percent) and the USA (5.7 percent). South Africa
accounted for 1.6 percent of world reserves and was ranked 11th (Table 48). World copper mine production
increased by 7.1 percent to 18.2 Mt in 2013 compared with 17 Mt in 2012, according to World Bureau of
Metal Statistics (WBMS). The recovery in production levels after three years of relative stagnation was a
result of new mine projects deferred during the financial crisis coming on stream. Chile continued to be the
world‟s largest copper mine producer, contributing 5.8 Mt to total output, followed by China at 1.7 Mt and
Peru at 1.4 Mt. In the continent, Zambia, Democratic Republic of Congo and South Africa were the largest
producers of copper collectively contributing 1.7 Mt.
TABLE 48: WORLD RESERVES, MINE PRODUCTION AND EXPORTS OF COPPER IN 2013
COUNTRY RESERVES PRODUCTION
Mt % Rank kt % Rank kt % Rank
Australia 86 12.6 2 990 5.4 5 404 4.8 3
Canada 10 1.5 12 632 3.5 9 171 2 9
Chile 190 27.9 1 5 776 31.6 1 2 586 30.6 1
China 30 4.4 5 1 707 9.3 2 293 3.5 7
DRC 20 2.9 9 812 4.4 7 *** *** ***
Indonesia 28 4.1 7 485 2.7 11 71 0.8 11
Kazakhstan 7 1 13 538 2.9 10 371 4.4 5
Peru 76 11.2 3 1 376 7.5 3 288 3.4 8
Poland 26 3.8 8 429 2.3 12 344 4.1 6
Russia 30 4.4 5 720 3.9 8 390 4.6 4
South
Africa
11 1.6 11 81 0.4 13 26 0.3 12
USA 39 5.7 4 1 255 6.9 4 116 1.4 10
Zambia 20 2.9 9 864 4.7 6 735 8.7 2
Other 107 15.7 - 2 629 14.4 - 2 660 31.5
TOTAL
2013
680 100 18 294 100 8 455 100
2012 680 - - 17 085 - - 8 680 - -
Sources: USGS, February 2014
WBMS, 2014
Directorate Mineral Economics: Copper concentrate
Notes: *** Not available
126
South Africa‟s copper production increased by 15.7 percent to 81 kt in 2013 compared with 2012 (Table
49). This was mainly due to improved operational capacity at Palabora Mining Company (PMC), which
accounts for more than 60 percent of the country‟s output, after refurbishment during the second half of
2012. Production from Platinum Group Metals (PMGs) mines remained at 25.6 kt in 2013. Local
consumption increased by 3.5 percent to 57 kt compared with 2012, while export sales decreased by 2.3
percent to 26 kt. About 50 percent of copper rod sold locally is converted into copper cables, 26 percent
consumed is domestic wiring while about 9 percent is consumed in the automobile industry. The remainder
of local copper output is used in the transformer, telecommunication, cord sets transportation and other
segments.
TABLE 49: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORT OF COPPER 2004-2013
YEAR
PRODUCTION LOCAL SALES EXPORT SALES
Mass Mass Value (FOR) Mass Value (FOR)
kt kt R'000 R/t kt R'000 R/t
2003 121 76 1 073 734 14 114 46 567 502 12 229
2004 103 84 1 542 829 18 381 29 583 293 16 495
2005 99 82 1 926 378 23 496 30 656 721 21 882
2006 110 84 3 892 035 46 452 24 1 064 092 43 598
2007 113 77 4 025 725 52 242 36 1 772 305 49 683
2008 97 68 4 120 564 60 168 33 1 507 356 45 860
2009 93 68 2 835 737 41 695 27 1 022 782 38 152
2010 84 57 3 160 029 55 750 25 1 209 297 48 718
2011 89 60 3 937 749 65 168 26 1 495 100 58 581
2012 70 55 3 575 956 65 454 27 1 598 770 59 562
2013 81 57 4 090 333 72 358 26 1 760 669 67 104
Sources: Directorate Mineral Economics, 2013
Notes: Exports include cathode. Blister and concentrates. The mass shown is that of metal and contained metal
Global refined copper production increased by 4.9 percent to 21.3 Mt compared with 20.3 Mt in 2012 due
to the restoration of production that was curtailed in 2012, emanating from maintenance and operational
shutdown in some regions. Additional output was attributed to increases in DRC (36.4 percent), China (16
percent) and Peru (16 percent), which offset the declines in Chile (5.1 percent), India (10.2 percent) and
Spain (16.9 percent). Regionally, Africa‟s refined copper production rose by 15.9 percent while Asia and
Oceania recorded increases of 9 percent and 3 percent of output, respectively. Europe‟s output decreased
by 4.1 percent, due to economic slowdown from industrial sectors.
127
FIGURE 39: GLOBAL REFINED COPPER PRODUCTION AND CONSUMPTION, 2008 – 2013
Source: World Bureau of Metal Statistics, 2014
Demand for copper rose by 4.3 percent to 21.0 Mt in 2013, due to continued investment in power and rail
infrastructure. Copper consumption was dominated by China and the USA, accounting for 46.9 percent
and 8.8 percent of world usage, respectively. China‟s copper consumption rose by 10.5 percent to 9.8 Mt
while the USA‟s demand grew by 4.6 percent to 1.8 Mt in 2013. China‟s strong growth was from power
generation and distribution industry as well as rail network, while growth from the USA was attributed to
automobile industry. Regionally, consumption rose by 6.8 percent to 14.1 Mt in Asia and by 3.6 percent to
2.9 Mt in the Americas, while Africa and Oceania‟s usage declined by 20.9 percent to 193 kt and 29.2
percent to 80 kt, correspondingly. European usage decreased by 1.6 percent to 3.5 Mt as a result of slow
recovery of the economy from the Euro-zone sovereign debt crisis.
PRICES
Copper prices slumped in the first quarter of 2013 and continued to trade within a bound range throughout
the year. Annual London Metal Exchange (LME) copper cash settlement prices on average decreased by
7.8 percent to $7 326/t compared with 2012 (Fig. 2). This was due to the slowdown of the China‟s industrial
activity as copper prices are often influenced by China‟s economic performance as the world‟s biggest
consumer. The depressed copper market pulled prices down to a low level of $6 893 /t in June 2013, while
the highest price on average was recorded in February 2013, at $8 070/t.
15.5
16.5
17.5
18.5
19.5
20.5
21.5
2008 2009 2010 2011 2012 2013
Mass (
Mt)
Period
Supply Demand
128
FIGURE 40: LME CASH SETLEMENT COPPER PRICES (MONTHLY AVERAGE), 2012-2014
Sources: DMR, Directorate Mineral Economics
London Metal Exchange (LME)
Local unit values increased by 10.5 percent to R72 358/t, while export unit values went up by 13 percent to
R65 454/t (Table 49). As a result, local revenues increased by 14.4 percent to R4.09 billion, while export
sales revenues went up by 11.5 percent to R1.76 billion owing to higher prices despite lower export
volumes.
EMPLOYMENT
Total employment in South Africa‟s primary copper mines decreased by 0.4 percent to 3 474 employees
compared with 3 487 in 2012, as a result of a combination of higher costs pressure and lower global
copper prices (Table 50).
TABLE 50: EMPLOYMENT AND REMUNERATION IN SOUTH AFRICA‟S COPPER MINES IN 2013
YEAR EMPLOYEE REMUNERATION PRODUCTION
Number R'000 Average Earning
R
Labour Productivity
t
2009 3 325 726 490 218 494 28
2010 3 540 839 712 237 207 24
2011 3 638 1 058 697 291 011 24
2012 3 487 1 163 107 333 555 20
2013 3 474 1 243 166 357 849 23
Sources: DMR, Directorate Mineral Economics
3000.00
4200.00
5400.00
6600.00
7800.00
9000.00
Jun-1
2
Jul-12
Aug-1
2
Sep-1
2
Oct-
12
Nov-1
2
Dec-1
2
Jan-1
3
Fe
b-1
3
Mar-
13
Apr-
13
May-1
3
Jun-1
3
Jul-13
Aug-1
3
Sep-1
3
Oct-
13
Nov-1
3
Dec-1
3
Jan-1
4
Fe
b-1
4
Mar-
14
Apr-
14
May-1
4
Jun-1
4
PR
ICE
S $
/T
Period
129
Total remunerations increased by 6.9 percent to R1.24 billion due to an increase in average earnings per
person. Average earnings increased by 7.3 percent in 2013 indicating an improvement of salary levels.
Employee‟s productivity rose by 15 percent to 23 t/employee compared with 20 t/employee recorded in
2012 and to R357 849 per employee on average. Female employees rose by 25.7 percent, increasing to
352 from 280 employees in 2012.
DEVELOPMENTS
Palabora Copper (Pty) Limited, a subsidiary of Palabora Mining Company, located in the town of
Phalaborwa in Limpopo Province, South Africa, completed a bankable feasibility study on a block-cave
development project known as Lift ll project in May 2014. The project is expected to extend the life of mine
by another 20 years to 2033 at expected capital investment of R9.3 billion. Proceeding to full execution
with the Lift ll project awaits the approval by the new shareholders who acquired the business in August
2013. Pending the shareholders decision, Lift ll project is one of South Africa‟s largest mining development
projects.
In the region, Metorex Limited, a subsidiary of Jinchuan Group, completed a feasibility study in 2012 to
determine the viability of the Kinsendi copper project, located in the border town of Kasumbalesa, in the
Democratic Republic of Congo (DRC). The $307.1 million Kinsendi projects ranks as one of the world‟s
highest grade copper deposits with estimated reserves of 20.7 Mt at 5.6 percent copper. The project is
estimated to produce approximately 24 kt of copper per annum for a period of 10 years. Metorex obtained
the approvals required by the DRC Mining Law regarding the project‟s environmental impact assessment
and associated management plans. Construction work commenced in April 2013, while production is
expected in the first quarter of 2015.
Also, in 2013, Metorex completed a pre-feasibility study on the Musonoi project, a copper and cobalt
green-field project in the mining town of Kolwezi in DRC. The study concluded that an underground mine
producing 1 000 kt of ore per annum with a life of more than 20 years could be established on the property.
The project‟s reserves were estimated at 31.7 Mt at a grade of 2.8 percent of copper and 0.9 percent
cobalt. Environmental Impact Assessment (EIP) as well as Environmental Management Plan (EAP) are
due to be submitted to DRC authorities for approval in 2014.
In Zambia, Grindrod Limited, a subsidiary of Grindrod Mauritius, signed an agreement with a Zambian
company Northwest Rail (NWR) to build, operate and maintain a new 590 km railway from Chingola in the
heart of the old Zambian Copper-belt to the Angolan border. The project plan consists of two phases.
Phase I extending from Chingola to the Kansanshi, Lumwana and Kalumbila mines (290 km of track), and
Phase II to connect with the Benguela line on the Zambian-Angola border near Jimbe, Angola. The new
mine development in the central and western copper-belt area of Zambia will need to transport ore up to
300 km for processing. Due to poor road infrastructure, transport costs become prohibitive. The rail
transport solution will be both economic and less damaging to the local environment. The capital cost for
130
the project is estimated at $989 million. Construction is expected to commence during 2014, subject to the
conclusion of the bankable feasibility study, which is currently underway.
OUTLOOK
World copper mine production strong growth is expected to continue through to 2015, after a 7 percent
growth was realised in 2013, owing to additional output from mine projects deferred during the financial
crisis and expected new capacity. World mine production is expected to grow by 5 percent in 2014 and a
further 7 percent in 2015 to 18.9 Mt and 20.3 Mt, respectively, according to the International Copper Study
Group (ICSG).
In 2014, world refined copper production is expected to increase by 5 percent to 22.1 Mt and by a further
4.1 percent to 23.1 Mt in 2015. This will be mainly due to the expanded capacity at electrolytic plants in
China and expanded solvent extraction and electro winning (SX-EW) capacity in Africa. Demand for refined
copper is expected to grow by 5 percent to 22.4 Mt in 2014. Demand from China is expected to increase by
7 percent due to the anticipated recovery of the industrial sector. The market is expected to be in excess of
about 400 kt of refined copper.
Copper prices are expected to be volatile in 2014 as a result of uncertainty about the China‟s economic
performance. LME warehouses, particularly in China, have been piling up while the industrial activity is
muted. Analysts expect prices to be relatively lower, hitting an annual average below $7 000 /t mark in
2014, while falling prices are likely to trigger the selling of stock, which might push prices further down.
More than 60 percent of the total copper produced in South Africa is sold locally. Demand from electricity
industry, the largest consumer of copper, is forecast to increase due to the ongoing infrastructure
development. The Lift ll project could help increase the country‟s copper output pushing it higher in the
production rankings.
REFERENCES
1. Creamer Media: Base Metals Report, December 2013
2. International Copper Study Group, Copper Market Forecast 2014-2015
3. London Metal Exchange (LME)
4. U.S Geological Survey, Mineral Commodity Summaries, February 2014
5. Monitor CRU: Copper
6. World Bureau Metal Statistics
131
LEAD
Silungiselelo Mnyameni
SUPPLY DEMAND
Deposits of lead ore are always associated with zinc and to lesser extent silver and copper minerals. More
than 20 occurrences of lead deposits have been reported in South Africa, but these are mainly small and
economically insignificant. The most significant occurrence is on the farm Aggeneys, in the Namaqualand
and Bushman-land regions in the Northern Cape Province, where Black Mounting Mine is currently
operating. The Black Mountain Mine comprises of three ore bodies, Broken Hill, Gamsberg and Swartberg.
In 2013, global lead reserves were estimated at 110 Mt. Australia, at 32.7 percent, held the largest
reserves followed by China (12.7 percent) and Peru (6.8 percent). South Africa accounted for 0.3 percent
of the world reserves and was ranked in 11th position (Table 51). World lead mine production increased by
5.4 percent to 5 433 kt in 2013 compared with 5 249 kt in 2012, according to the International Lead and
Zinc Study Group (ILZSG). The slight increase was principally due to the reported 21.3 percent increase in
Australia, after the re-opening of the Paroo Station mine (previously known as Magellan) as well as
expansion at Mount Isa. The global increase was offset by decrease of 65.6 percent in Canada as well as
19.2 percent in South Africa (Table 51). South Africa‟s production decrease was due to low head grade
realised throughout the year at Black Mountain Mine. Africa collectively accounted for 1.6 percent (87 kt) of
the world total. South Africa, at 42 kt, had the continent‟s largest lead mine production followed by Morocco
at 23 kt.
TABLE 51: WORLD RESERVES, MINE PRODUCTION AND EXPORTS OF LEAD, 2013
COUNTRY RESERVES PRODUCTION EXPORTS
Mt % Rank kt % Rank kt % Rank
Australia 36 32.7 1 711 13.1 2 216 12.4 1
Canada 0.5 0.5 8 22 0.4 20 148 8.5 2
China 14 12.7 2 2 850 52.5 1 22 1.3 6
India 3 2.7 6 105 1.9 7 - - -
Ireland 0.6 0.5 8 43 0.8 12 - - -
Mexico 6 5.5 4 253 4.7 5 140 8.1 3
Morocco 0.1 0.1 10 23 0.4 18 10 0.6 8
Peru 7.5 6.8 3 267 4.9 4 84 4.8 4
South
Africa
0.3 0.3 9 42 0.8 13 4 0.2 9
Sweden 1 0.9 7 60 1.1 10 65 3.7 5
USA 5 4.5 5 340 6.3 3 21 1.2 7
Other 36 32.7 - 717 13.2 - 1 027 59.1 -
TOTAL 110 100 - 5 433 100 - 1 737 100 -
Sources: ILZSG, October 2014
USGS, Mineral Commodity Summaries February 2014
DMR, Directorate Mineral Economics
132
Note: * World Bureau of Metal Statistics, Exports of Refined Lead
X Not specified but estimate have been included in other countries
South Africa‟s lead mine production decreased by 19.2 percent to 42 kt in 2013 compared with 52 kt in
2012. The decrease in production was due to low head grade realised throughout the year. As a
consequence of the decrease in production, export sales decreased by 29.6 percent to 38 kt in 2013
compared with 2012 (Table 52). South Africa exports all its lead mine production to China, France and
Switzerland.
TABLE 52: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF LEAD 2004-2013
YEAR
PRODUCTION LOCAL SALES EXPORT SALES
Mass Mass Value (FOR) Mass Value (FOB)
kt t R‟000 R/t kt R‟000 R/t
2004 37 - - - 31 120 599 3 895
2005 42 - - - 47 211 458 4 497
2006 48 - - - 46 313 232 6 809
2007 42 - - - 37 492 678 13 315
2008 46 - - - 50 612 042 12 180
2009 49 - - - 44 482 903 11 002
2010 51 - - - 53 696 738 13 123
2011 54 - - - 52 762 929 14 569
2012 52 - - - 54 811 498 15 132
2013 42 - - - 38 683 219 18 066
Source: DMR, Directorate Mineral Economics
Global refined lead production increased by 5.6 percent to 11 121 kt compared with 10 530 kt in 2012. The
global increase was due to 30.4 percent increase from Italy after the re-opening of the Porto Vesme lead
plant in February 2013. As a region, Asia dominated lead metal production contributing 60 percent to total
output followed by America‟s 21 percent and 16 percent from Europe (Fig. 1). Africa‟s refined lead
production decreased by 8.1 percent to 91 kt compared with 99 kt in 2012, accounting for 0.8 percent of
the global production. At 52 kt, South Africa was the largest producer in Africa, even though the country‟s
production was 3.7 percent lower compared with 2012.
133
FIGURE 41: REFINED LEAD PRODUCTION IN 2013
Sources: ILZSG, October 2013
World refined lead metal consumption grew by 6.6 percent to 11.16 Mt in 2013 compared with 10.47 Mt in
2012. Asia continued to dominate global lead consumption accounting for 63.2 percent, followed by the
America‟s 20.7 percent and Europe‟s 15.1 percent (Fig. 2). Africa‟s consumption declined by 2 percent to
98 kt in 2013 and contributed 0.9 percent to global lead usage. South Africa dominated Africa‟s
consumption accounting for 69.4 percent of the continent‟s usage, followed by Algeria at11.2 percent.
Asia‟s domination in lead consumption is driven by higher demand from China, accounting for 44.7 percent
of total world usage.
FIGURE 42: REGIONAL LEAD METAL CONSUMPTION IN 2013
Sources: ILZSG, October 2013
DMR, Mineral Economics Directorate
Europe 16%
America 21%
Asia 60%
Other 3%
Europe 15%
America 20%
Asia 64%
Other 1%
134
PRICES
In 2013, the lead market was in balance. The annual London Metal Exchange (LME) lead prices averaged
$2 141.14/t, showing a 3.9 percent increase compared with 2012. This increase was mainly due to the
recovery of the auto industry in the US, the world‟s second biggest market for lead. The lowest lead cash
settlement on average recorded was in May 2013, at $2 028.29/t while the maximum average price was
recorded in February at $2 376.20/t (Fig.3). Prices are expected to continue to rise marginally through
2014/15, as a result of the recovery of the global market demand.
FIGURE 43: LEAD CASH SETTLEMENT PRICES (MONTHLY AVERAGE) IN 2013
Source: DMR, Directorate Mineral Economics
London Metal Exchange
South Africa recorded a 29.6 percent decrease in export sales volumes to 38 kt compared with 2012.
Revenues decreased by 15.8 percent to R683 million in 2013 compared with R811 million recorded in
2012, (Table 52). Despite the increase in unit values by 19.4 percent from R15 132 in 2012 to R18 066
recorded in 2013, the fall in production and subsequent export sales volumes resulted in lower revenues
generated.
EMPLOYMENT
Total employment in South Africa‟s lead mines increased by 8.6 percent to 1 437 employees in 2013
compared with a 1 323 employees in 2012. Total remuneration rose by 11.5 percent to R205 million due to
an increase in employment and average earnings per person (Table 53).
1 700.00
1 800.00
1 900.00
2 000.00
2 100.00
2 200.00
2 300.00
2 400.00
2 500.00
Pri
ces U
S$/t
Period
135
TABLE 53: EMPLOYMENT AND REMUNERATION IN SOUTH AFRICA‟S LEAD MINES IN 2013
YEAR EMPLOYEE REMUNERATION PRODUCTION
Number R'000 Average Earnings
R
Labour Productivity
t
2009 2 020 144 605 71 587 25
2010 1 893 156 456 82 650 27
2011 1 312 167 552 127 707 40
2012 1 323 184 164 139 212 40
2013 1 437 205 403 142 939 29
Sources: DMR, Directorate Mineral Economics
Average earnings per person increased by 2.7 percent in 2013 indicating an improvement of salary levels.
Female employment also rose by 11.4 percent to 196 employees compared to 176 employees in 2012. A
decrease in lead mine production due to low head grade realised throughout the year, resulted in a 27.5
percent decrease in employee‟s productivity to 29 t compared with 40 t per employee in 2012.
DEVELOPMENTS
In South Africa, Black Mountain Mine, a subsidiary of Vedanta Resources plc, located in the Northern Cape
Province, completed a technical feasibility study on the Gamsberg project, in September 2013. Owing to
the nature and structure of the ore body, the study proved that high levels of production can be achieved
economically from an open pit operation, where a projected 360 kt per annum of zinc concentrate at full
capacity can be generated. However, continuing with mining activities at a zinc price below $2 500/t will not
be viable as per the technical feasibility study that was completed in September 2013. A definitive
Feasibility Study on a smaller operation is currently in progress. The projected mine production of 40.5 Mt
of ore at 0.5 percent of lead and 6.5 percent of zinc with a ten year life of mine is expected to create
between 600 – 1000 full time jobs, 500 – 800 support and services and 2000 – 3000 temporary labour
during the construction phase.
In the region, North River Resources plc, has concluded a Mine Development Plan which was undertaken
by Snowden Mining Industry Consultants (Snowden) for the production of lead, zinc and silver from the
Namib Lead Zinc Project, in Swakopmund, Namibia. The project is centered on the underground Namib
Lead Mine which was abandoned in 1992. The project‟s reserves are estimated at 1.5 Mt at a grade of 2.4
percent of lead and 6.4 percent of zinc. The company announced that it has been granted an
environmental clearance by the Namibia Ministry of Environment and Tourism for the environmental
assessment and management plan for the proposed recommissioning of its Namib Lead Mine. Production
is expected to commence in 2015.
136
OUTLOOK
Global lead mine production is forecast to increase by 2.4 percent to 5.56 Mt in 2014, following a 5.6
percent rise in 2013, (ILZSG). This is primarily as a consequence of higher output in Australia and China.
Australian production has benefited from the re-opening of the Paroo Station mine in March this year which
is expected to produce 85 kt per year when in full capacity as well as the expected production from the
expansion of Mount Isa‟s operations.
World refined lead production increased by 4.7 percent in 2013 and is forecast to rise marginally by 1.5
percent to 11.29 Mt in 2014. The main influence in the reduction of output is due to the closure of the
United States‟ Doe Run‟s Herculaneum primary plant in Missouri at the end of 2013 and the shutdown of
Exide Technologies secondary plant in Vernon, California in March 2014. Additional capacity is expected
from the Republic of Korea, currently the third world‟s largest producer of lead metal behind China and the
United States. Republic of Korea plan to increase production by 5.7 percent to reach half a million tonnes
of lead metal. Additional production will also come on line from Belgium, China, France, India, Italy and
Kazakhstan. It is anticipated that global refined lead consumption will increase by 1.4 percent in 2014 to
11.33 Mt, driven mainly by the growth in China where consumption is forecast to increase by 2.5 percent in
2014, due to stronger demand from automotive and e-bike sectors as well as the development of the world
largest 4G network. Demand in Europe is forecast to increase by 1.8 percent in 2014, mainly driven by a
forecast recovery in Italian demand while the US‟s consumption is expected to rise by a modest 0.6
percent.
Taking into consideration the projected lead supply and demand trajectories, the global refined lead metal
market is expected to be in deficit by 38 kt (ILZSG). Vehicle sales in China and the US have been strong,
boosting demand of original equipment lead-acid batteries, while replacement batteries provide a regular
source of demand (Sucden Financial). The development of new technologies in recent years is a potential
growth area for the future.
LME stock levels have been declining since the second half of 2013 and are currently relatively low while
mine supply is constrained. The auto industry looks strong in the US and in China while a recovery in
Europe is in progress. These could lead to market tightening, edging prices higher.
South Africa‟s lead mine production is expected to increase following the re-opening of the Swartberg mine
in May 2014. Currently a relatively small mining operation is underway at approximately 20 kt a month. The
Swartberg project is expected to increase Black Mountain Mine‟s life by 10 – 15 years.
137
REFERENCES
1. Creamer Media: Base Metals Report, December 2013
2. International Lead and Zinc Study Group, Monthly Bulleting Lead and Zinc Statistics, October 2013.
3. International Lead and Zinc Study Group, April Session/Forecast, April 2014
4. http://www.fastmarkets.com/base-metals/lead-analysis-forecast-q4-2013
5. htt://www.metalbulletin.com
6. Mining Weekly, 30 July 2014
7. U.S. Geological Survey, Mineral Commodity Summaries, February 2014
8. DMR, Mineral Economics Directorate
138
NICKEL
Lerato Ramane & Mathabo Ikaneng
SUPPLY - DEMAND
World nickel reserves were estimated at 74 Mt in 2013. At 24.3 percent, Australia has the world‟s largest
reserves followed by New Caledonia‟s 16.2 percent and Brazil‟s 11.4 percent. South Africa accounts for 5
percent of world reserves and is ranked 7th (Table 54).
World nickel mine production rose by 15.7 percent to 2.49 Mt in 2013, compared with 2.1 Mt in 2012,
boosted by new nickel projects. Indonesia and the Philippines at 17 percent each were the largest
producers of nickel, followed by Russia at 10 percent. South Africa at 5 percent was ranked 11th.
TABLE 54: WORLD NICKEL RESERVES AND MINE PRODUCTION, 2013
COUNTRY RESERVE MINE PRODUCTION
kt Percent Rank kt Percent Rank
Australia 18 000 24.3 1 240 9.6 4
Brazil 8 400 11.4 3 149 6.0 8
Canada 3 300 4.5 8 225 9.0 5
China 3 000 4.1 9 95 3.8 8
Colombia 1 100 1.5 11 75 3.0 9
Cuba 5 500 7.4 5 66 2.7 10
Indonesia 3 900 5.3 6 440 17.7 1
Madagascar 1 600 2.2 10 26 1.0 12
New Caledonia 12 000 16.2 2 145 5.8 7
Phillippines 1 100 1.5 12 440 17.7 2
Russia 6 100 8.2 4 250 10.0 3
South Africa 3 700 5.0 7 *51.2 2.1 11
Other 6 300 8.5 287.8 11.6
TOTAL 74 000 100 2 490 100
Australia 70 000 2 100
Source; USGS, Mineral Commodity Summaries, Nickel
*DMR, Mineral Economics Directorate
In South Africa, nickel production increased by 11.5 percent to 51.2 kt in 2013, compared with 45.9 kt in
2012, due to enhanced efficiencies and an increase in overall plant recoveries at Nkomati Mine, the only
nickel primary producer (Table.55). Local sales volumes declined by 21.2 percent to 8.9 kt, compared with
11.3 kt in 2012, owing to weaker demand from major consumers.
139
TABLE 55: SOUTH AFRICA‟S PRODUCTION AND SALES OF NICKEL, 2003 – 2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Mass Value Unit Value Mass Value Unit value
kt kt R‟000 R/t Kt R‟000 R/t
2003 40.8 24.0 1 647 992 68 666 16.1 1 081 275 67 160
2004 39.9 25.0 2 139 682 85 587 17.8 1 513 381 85 021
2005 42.4 20.3 1 909 468 94 062 22.2 2 013 553 90 701
2006 41.8 25.6 4 154 730 162 294 18.2 2 620 855 144 003
2007 37.9 15.5 3 724 689 240 303 21.4 5 599 739 261 670
2008 31.7 6.7 1 151 894 171 924 23.5 4 103 711 174 626
2009 34.6 9.0 949 855 105 539 27.3 3 251 353 119 097
2010 40.0 7. 3 1 073 290 147 168 33.1 4 911 462 148 522
2011 43.3 14.5 2 326 440 160 924 26.6 4 075 750 152 962
2012 45.9 11.3 1 539 962 136 182 35.5 4 892 384 137 786
2013 51.2 8.9 1 216 372 136 303 40.5 5 743 349 141 741
Source: DMR, Mineral Economics Directorate
In 2013, global refined nickel production increased by 7.8 percent to 2.00 Mt supported by increased output
from Africa and Asia. China, at 35.5 percent, was the world‟s largest producer of refined nickel, followed by
Russia‟s 13.3 percent and Japan‟s 8.9 percent. South Africa contribution declined to 1.6 percent of global
refined nickel production and was ranked 12th.
TABLE 56: WORLD REFINED NICKEL PRODUCTION, 2013
COUNTRY REFINED PRODUCTION
kt Percent Rank
Australia 142.0 7.1 4
Brazil 59.1 3.0 7
Canada 137.4 6.9 5
China 710.7 35.5 1
Colombia 49.4 2.5 8
Cuba 28.0 1.4 13
Finland 44.3 2.2 10
Japan 177.8 8.9 3
New Caledonia 48.4 2.4 9
Norway 91.0 4.5 6
Russia 266.4 13.3 2
South Africa 32.3 1.6 12
UK 40.4 2.0 11
Other 174.5 8.7
TOTAL:2013 2 001.7 100.0
2012 1 856.2
Source: World Bureau of Metal Statistics(WBMS) , 2014
140
The stainless steel industry is the largest consumer of nickel, accounting for 65 percent of the metal global
consumption (Fig.1), followed by the manufacture of nonferrous and ferrous alloys respectively accounting
for about 12 percent and 8 percent. The swelling of Chinese production of NPI, a cheaper substitute that
makes nickel less appealing has affected demand for nickel. The situation is exacerbated by the increased
use of stainless steel scrap in Europe.
South Africa produces about 500 kt per annum of stainless steel, of which only 150 kt are converted locally
into value-added products while the balance is exported. The catalytic converter industry is the highest
consumer of stainless steel in South Africa.
FIGURE 44: THE PRIMARY END-USES FOR NICKEL 2013
Source: Basemetals.com, 2013
PRICES
The nickel market excess which was experienced throughout 2012 continued into 2013. Consequently,
nickel prices depreciated further in 2013 despite the slow global economy recovery, reaching an average of
$17 577/t. The downward price trend, which lasted 11 months, was briefly interrupted in February when
prices rose to $17 728/t (Fig.2). By November, the cash price had fallen to $13,725/t; the price drop was
accompanied by the gradual build up of stocks in LME warehouses to record high levels.
However, in 2014 the nickel market broke out of its five year price slump with a vengeance, with the cash
price significantly increasing from $14 076/t in January to $19 434/t in May. This was as a result of
increasing supply tightness due to the implementation of the Indonesian export ban on unprocessed ores
since January 2014 and increased geopolitical tensions resulting from the Ukranian crisis.
Stainless steel 65%
Non-Ferrous Alloys 12%
Electroplating 8%
Ferrous Alloys 8%
Batteries & Other 7%
141
In line with the LME nickel prices, South Africa‟s local and export unit sales values gradually increased by a
respective 0.1 and 2.9 percent to R136 303/t and R141 741/t in 2013 compared with 2012. As a result of
lower sales volume, local sales revenue fell by 21 percent to R1.22 billion. However, both export volumes
and revenue increased 14.1 and 17.4 percent to 40.5 kt and R5.74 billion, respectively, due to growing
demand as the nickel market tightened (Table 55).
FIGURE 45: MONTHLY AVERAGE NICKEL PRICES, 2012- 2014
Source: Metal Bulletin
EMPLOYMENT
In 2013, South Africa‟s primary nickel industry employed 3 149, 3.2 percent more than in 2012, due to
expansions at Nkomati mine. Female employment which rose by 13 percent, accounted for only 15 percent
of total employment in this sector. Total remuneration increased by 6.2 percent to R5.71 billion, compared
to R5.38 billion in 2012. However, female remuneration only accounted for 12 percent of the total earnings
indicative of the levels that women occupy in this sector. Nevertheless per capita earnings rose by 2.9
percent in the same period (Table 57).
0
5000
10000
15000
20000
25000
Jan-1
2
Fe
b-1
2
Mar-
12
Apr-
12
May-1
2
Jun-1
2
Jul-12
Aug-1
2
Sep-1
2
Oct-
12
Nov-1
2
Dec-1
2
Jan-1
3
Fe
b-1
3
Mar-
13
Apr-
13
May-1
3
Jun-1
3
Jul-13
Aug-1
3
Sep-1
3
Oct-
13
Nov-1
3
Dec-1
3
Jan-1
4
Fe
b-1
4
Mar-
14
Apr-
14
May-1
4
LM
E P
rice (
$/t
)
period
142
TABLE 57: EMPLOYMENT IN THE PRIMARY NICKEL SECTOR
YEAR
TOTAL
EMPLOYEES
TOTAL REMUNERATION (R) PER CAPITA PAYMENTS
2011 2 695 514 292 608 190 832
2012 3 051 538 039 800 176 349
2013 3 149 571 601 731 181 518
Source: DMR, Mineral Economics Directorate
NB: Employment figure excludes sector where nickel is produced as a by-product
RECENT DEVELOPMENTS
In January 2014, Indonesia barred the export of unprocessed nickel ores. This has driven prices upwards,
creating opportunities for nickel projects elsewhere in the world to supply countries such as China, which is
a significant nickel importer. It is also likely that the ban will stay in place following Indonesia‟s presidential
elections in July 2014, where policies implemented will remain unchanged.
URU Metals owns 100 percent of the Zebediela Nickel Sulphide Project following the completion of the
acquisition of shares of Umnex Minerals Limpopo (Pty) Ltd in April 2014. The project is located in the
Limpopo Province of South Africa close to the platinum mining town of Mokopane. This is a world-class
project with combined inferred and indicated resources of over 1.5 billion tonnes of nickel. A Preliminary
Economic Assessment (PEA) was completed in 2012 showing indicated resources of 485.4 Mt averaging
0.245 percent Ni with additional inferred resources of 1 115.1 Mt at a grade of 0.248 percent Ni. On
commencement of production, the Zebediela Nickel Sulphide Project will be the 12th biggest nickel mine in
the world. The capital investment required for this project is estimated at $708 million. Eventually, if all
activities occur as scheduled, URU will apply to convert its exploration licences to mining licences early in
2017, where the development timeframe required for production is expected to be about 24 months.
URU Metals also owns 50 percent of the Burgersfort nickel project, a joint venture between SAN and BSC
Resources; it is located in the Mpumalanga Province of South Africa. Previous exploration of this site by
Goldfields and Falconbridge identified several shallow disseminated nickel targets and three deeper
massive sulphide nickel targets. Three major targets have been identified on the property. Diamond drilling
was done at these locations. However, this project has been put on hold pending an arbitration process
undertaken by URU partners. Table 58 depicts other developments in the nickel mining industry in other
parts of the world.
143
TABLE 58: GLOBAL NICKEL MAJOR PROJECTS
Project Country/Region Operators/Owners Potential
start year
Nickel
production
(kt/a)
*Project
Cost
Koniambo Laterite Nickel
Mine
New Caledonia Xstrata Plc 2014 60 $51 billion
Mindoro Laterite Nickel
Project
Philippines Intex Resources
ASA
NA 53 $2.45
billion
Long Harbour
Hydrometallurgy Nickel
Smelter
Canada Vale S.A 2014 50 $3.5
billion
Minago Nickel Project Canada Victory Nickel Inc. 2014 11 $523
million
Honeymoon Well Nickel
Project
Australia OJSC MMC Norilsk
Nickel
2017 40 $1.5
billion
Taganito Hpal Nickel
Refinery
Philippines Sumitomo Metal
Mining Co.Ltd
2013 30 $1.4
billion
Feni Haltim Nickel Project Indonesia PT Antam Tbk 2015 27 $1.6
billion
Acoje Laterite Nickel Mine Philippines DMCI Holdings Inc 2014 24.5 $33.6
million
Fenix Laterite Nickel
Operation
Guatemala Solway Group 2014 24.3 $170
million
Agata Laterite Nickel
Project
Philippines TVI Pacific Inc NA 17.2 $308
million
Decar Nickel Project Canada Cliffs Natural
Resources Inc
NA 37.4 C$1,384
million
Dumont Nickel Project Canada Royal Nickel
Corporation
2016 47 $1.6
billion
Kalgoorlie Laterite Nickel
Project
Australia Heron Resources
Limited
23 A$356
million
Marlborough Laterite
Nickel Project
Australia Gladstone Pacific
Nickel Ltd
2015 63 $3.5
billion
Mayaniquel Laterite Nickel
Mine
Guatemala Anfield Nickel Corp 36.5 $946
million
Ronnbacken Nickel/PGE
Project
Sweden IGE Resources AB 2015 26 $1.2
billion
Turnagain Nickel Project Canada Hard Creek Nickel
Corporation
2016 39.5 $1.3
billion
Wingellina Laterite Nickel
Deposit
Australia Metals X Limited NA 40 $2.3
billion
144
Source: KPMG, 2013
Various sources
OUTLOOK
Mine production is expected to drop by 2.5 percent in 2014 to 2 093 kt due to declines in mine production
from Indonesia which is expected to fall by about 17 percent annually to 368 kt in 2014 as a result of lower
demand for Indonesian laterite ore which is used to produce NPI. Notwithstanding projected nickel prices,
the Indonesian government‟s move to ban unprocessed ore exports will further drive production cutbacks.
Global refined nickel production is expected to decrease by 2.8 percent to 1.781 kt in 2014, compared with
2013, owing to the restrictions on refined nickel in response to the projected oversupply and China‟s
elimination of excess capacity to achieve energy saving and environmental goals. China is expected to
continue as the world‟s largest producer of refined nickel in the medium term. However, China‟s production
of NPI, which is produced from lower-grade nickel laterite ore, could decline in the medium term, as
reserves start depleting. Prices of NPI are sensitive to prevailing global nickel prices, which are expected to
increase due to the banning of exports of unprocessed nickel ore in Indonesia since the beginning of 2014.
This could affect Chinese production as ore exports from Indonesia account for 60 percent of its ore imports
expected to have solid growth in consumption in 2014 and 2015 if its economy maintains its growth
trajectory.
Prices are expected to remain low in 2014 as the market excess. In the medium-term, increased
construction activity in emerging Asian economies and a rebound in European economic activity could
increase demand and drive refined nickel prices upwards. Moreover, global stocks of nickel are expected to
decline as the growth in refined production from Africa and South America is expected to be offset by the
increase in demand. Further influencing the outlook is Indonesia‟s enacted ban on unprocessed ore exports
which may limit NPI production.
In South Africa, the production of nickel will continue on a positive trajectory, due to enhanced efficiencies
at the Nkomati Nickel Mine. Additionally, it is likely to raise the country‟s output and the country ranking
improves. These projects are likely to also contribute to temporary jobs in their construction phase and
permanent jobs during their operational phase. Additionally, more output is expected from the platinum
sector as labour relations stabilise.
145
REFERENCES
1. Creamer Media‟s Research Channel, A Review Of Africa‟s Base Metal Sector December 2013
2. DMR, Directorate Mineral Economics
3. file:///C:/Users/sharon.ramane/Downloads/Gladstone%20Nickel%20Project%20(GNP).pdf
4. http://nickelmountain.se/assets-operations/ronnbacken/
5. http://www.anfieldnickel.com/s/Mayaniquel.asp?ReportID=591208
6. http://www.armannualreportfinance.yahoo/news/ global-china-nickel report.com
7. http://www.asx.com.au/asxpdf/20140408/pdf/42nw5wdq1sk6qb.pdf
8. http://www.firstpointminerals.com/s/Decar_BC.asp
9. http://www.hardcreek.com/i/pdf/FACT-SHEET_AMC_PA_December-2011_Mark.pdf
10. http://www.metalsx.com.au/system/announcements/508/20130419_MLX_Appoints_SNC_for_Wing_DFS.pdf
11. http://www.mindoro.com/s/Agata_Dev_Options.asp
12. KPMG Quarterly Bulletin
13. Metal Bulletin
14. Mining Review Africa Issue 7 2014, Zebediela: The Nickel Needle In South Africa‟s Haystack
15. USGS, Mineral Commodity Summaries, January 2014
146
TITANIUM
Mathabo Ikaneng
SUPPLY – DEMAND
World titanium reserves were estimated at 750 Mt in 2013, a 7.2 percent increase compared with 2012
(Table 59). China at 26.7 percent, hosted the world‟s largest titanium reserves, followed by Australia‟s 24.6
percent and India‟s 12.3 percent. World production of titanium mineral concentrates (ilmenite, rutile
leucoxene, and titanium slag), usually referred to as titanium dioxide (TiO2) feedstock, amounted to 7.56 Mt
in 2013, representing an increase of 4.4 percent compared with the previous year (Table 59). This increase
in supply was the continuation of producers‟ undertaking to match rising global demand for titanium
minerals. Australia, at 1.39 Mt, remained the top producer of TiO2 feedstock, contributing 18.4 percent to
total world production. South Africa, at 1.22 Mt, was the second major producer, followed by China‟s 0.95
Mt and Canada‟s 0.77 Mt (Table 59). Approximately 75 percent of global output is provided by the world's
top 11 titanium feedstock producers with approximately 6 percent of this used in titanium metal
manufacture.
TABLE 59: WORLD RESERVES AND MINE PRODUCTION OF TITANIUM CONCENTRATES, 2013
RESERVES PRODUCTION*
COUNTRY Mt % Rank kt % Rank
Australia 184.0 24.6 2 1 390 18.4 1
Brazil 44.2 5.9 5 47 0.6 13
Canada 31.0 4.1 8 770 10.2 4
China 200.0 26.7 1 950 12.6 3
India 92.4 12.3 3 366 4.8 10
Madagascar 40 5.3 6 430 5.7 8
Mozambique 14.5 1.9 9 489 6.5 6
Norway 37.0 4.9 7 400 5.3 9
Sierra Leone 3.8 0.5 11 90 1.2 12
South Africa 71.3 9.5 4 1 220 16.1 2
Sri Lanka 0 0 0 32 0.42 14
Ukraine 8.4 1.1 10 470 6.2 7
USA 2.0 0.3 12 300 4.0 11
Vietnam 1.6 0.2 13 500 6.6 5
Other 26.4 3.5 - 107 1.4 -
TOTAL**2013 750.0 100.0
7 560 100.0
2012 700.0
7 230
Sources: USGS, January 2014, p 173
Notes: *TiO2 content of ilmenite, titanium slag and rutile
**Totals are rounded
147
According to TZMI, a mineral sands consulting company, the production of TiO2 pigment fell by 0.97
percent from 5.18 Mt in 2012 to 5.13 Mt in 2013 due to market oversupply. In an effort to run down high
TiO2 inventory levels, major producers intentionally reduced operating rates to 72 percent of global capacity
in 2013. The high inventory levels were a result of new capacity especially from China and the subdued
demand for TiO2 pigment. The situation was compounded the upturn in TiO2 feedstock prices which
squeezed profit margins for TiO2 producers. The unexpected slowdown of China‟s growth and continued
weakness in the EU resulted in a decline in TiO2 pigment sales. According to Merchant Research and
Consulting, a metals and minerals research company, world titanium metal sponge production amounted to
222 kt in 2013, an 11 percent increase from 2012 levels due to new production capacity from Ukraine and
Canada. Russia, Japan and China were the main producers of global titanium sponge, together accounting
for 81 percent of total sponge production in 2013.
TABLE 60: SOUTH AFRICA‟S TITANIUM PRODUCTION AND SALES, 2005 - 2013
YEAR
PRODUCTION LOCAL SALES EXPORT SALES
Mass Mass Value (FOR) Mass Value (FOB)
kt kt RM R/t kt RM R/t
2005 2 682 1 759 284 162 254 610 2 405
2006 2 463 1 985 352 177 253 696 2 747
2007 2 605 2 021 394 195 220 604 2 748
2008 2 439 2 087 427 205 165 563 3 417
2009 2 507 1 621 414 256 105 494 4 694
2010 2 339 2 009 434 216 136 581 4 262
2011 2 896 2 355 562 239 136 658 4 820
2012 2 801 2 621 2 315 883 95 1 451 15 190
2013 2 604 2 682 2 712 1 011 100 1 028 10 256
Source: DMR, Mineral Economics
South Africa‟s titanium minerals mine production decreased by 7.03 percent to 2 604 kt in 2013 compared
to 2 801 kt recorded in 2012 (Table 60). The decline in production was due to depleting resources at
Hillendale mine which was nearing its end of life. Local and export sales volume increased by 2.3 percent
and 5.2 percent respectively to 2 682kt and 100kt.
About 90 percent of TiO2 feedstock is used in the manufacture of TiO2 pigment and the remaining 10
percent is used in the production of titanium metal and welding electrode fluxes. Close to 90 percent of
manufactured titanium sponge is used in the manufacture of titanium and titanium alloy products for four
key end-markets: commercial aerospace, industrial applications, defence, and emerging applications. TiO2
pigment demand is closely linked to the availability of disposable income and global GDP growth rates as it
is considered as a “quality of life” product. Demand increased by 12.2 percent to 5.34 Mt in 2013, 4 percent
above supply with the shortfall sourced from existing inventory stocks. The paint and coatings industry is
the major consuming sector for TiO2 pigment, accounting for about 56 percent of global demand, followed
by plastics‟ 24 percent, paper‟s 8 percent and other accounting for 12 percent balance (Fig. 1).
148
FIGURE 46: GLOBAL CONSUMPTION OF TITANIUM DIOXIDE PIGMENT BY SECTOR IN 2013
Source: TZMI
PRICES
In 2013, the global market dynamics of the titanium feedstock sector were influenced by de-stocking at the
pigment producers‟ end, resulting in lower off-take for feedstocks in 2013. Feedstock prices were almost
flat for most of 2013, before trending downwards in the last three months of the year. Prices failed to
recover in an environment of slow demand, high production costs resulting in feedstock producers scaling
back on output.
Paints and coatings, 56%
Plastics, 24%
Paper, 8%
Other, eg. inks, fabrics,
cosmetics, 12%
149
FIGURE 47: METAL BULLETIN PRICES FOR RUTILE AND ILMENITE, 2013 – 2014
Source: Metal Bulletin, 2013 - 2014
Average rutile (95% TiO2) prices declined by 29 percent to A$ 1 681/t after reaching record high levels in
2012 while ilmenite (min 54% TiO2) increased slightly by 5.2 percent to A$ 277/t. In the first quarter of
2014, titanium feedstock inventory levels remained at elevated levels, maintaining pressure on feedstock
prices although market strengthening is visible in some areas providing hope of price improvements in the
near future. Revenues generated from local sales of titanium minerals increased by 17.1 percent to R2.7
billion due to a 14.5 percent increase in unit values while export related revenues declined by 29.1 percent
to R1.02 billion in line with a 32.5 percent decline in unit values (Table 60)
DEVELOPMENTS
Production commenced at US$14.5 million Mineral Commodities‟ (MRC) Tormin project in the Western
Cape Province of South Africa. Feasibility studies had indicated a capacity of 1.2 Mt, producing 47.8kt per
year of nonmagnetic concentrate grading 81 percent zircon and 11.6 percent rutile and more than 100ktpa
Ilmenite over a 3 - 5 year mine life. By December 2013, the company had accumulated stockpile of 60 kt of
heavy mineral sands ready to be processed. The plan is to ship the concentrate produced to China in
terms of an off take agreement where it would be processed further to produce final zircon and rutile. The
ilmenite, which is primarily used in pigment, would be beneficiated in South Africa. During the construction
phase, approximately 65 local jobs were created while 100 permanent jobs would be created during the life
of the mine. It is estimated that another 400 indirect jobs will be created from transport and other feeder
services. According to MRC, the company has recently acquired the rights to the offshore area adjacent to
Tormin. This area is the source of Tormin ore body and it supports the concept of replenishment mining
which will substantially extend the Tormin life of mine.
900.00
1100.00
1300.00
1500.00
1700.00
1900.00
2100.00
2300.00
2500.00
2700.00
190.00
200.00
210.00
220.00
230.00
240.00
250.00
260.00
270.00
280.00
290.00
300.00
310.00
Jan-1
3
Fe
b-1
3
Mar-
13
Apr-
13
May-1
3
Jun-1
3
Jul-13
Aug-1
3
Sep-1
3
Oct-
13
Nov-1
3
Dec-1
3
Jan-1
4
Fe
b-1
4
Mar-
14
Apr-
14
May-1
4
Jun-1
4
Ru
tile
Pri
ce (
A$/t
)
Ilm
en
ite P
rice (
A$/t
)
Month-Year
Ilmenite concentrate (min 54% TiO2) Rutile concentrate (min 95% TiO2)
150
The Fairbreeze Mine in the KwaZulu-Natal Sands region, which is being developed to serve as a
replacement to the Hillendale Mine in the same region, is expected to start up in the first half of 2015.
Tronox, an Australian holding company, owns 74 percent in Fairbreeze and the remaining 26 percent is
owned by Exxaro Resources, a BEE company. Fairbreeze, is expected to have a life of mine (LOM) of
between 12 and 15 years and has a planned annual capacity of 500 kt ilmenite and 60 kt zircon. Tronox
expects the new heavy mineral sands mine to preserve more than 1 000 employees from Hillendale mine,
which came to the end of its life in the first half of 2012 and generate an additional 1000 indirect jobs.
In March 2014, titanium ore and titanium dioxide producer Tronox secured approval for its planning
application from the Umlalazi Municipality to amend land use rights on its Fairbreeze C extension (FBCX)
mining area, from un-zoned to mining. The company expects to commence mining operations at FBCX
area in the second half of 2017, following approvals. The FBCX ore body has a life-of-mine of 7 years.
In 2013, South Africa's Council for Scientific and Industrial Research (CSIR) and US aerospace giant
Boeing signed an agreement to collaborate on research and development of titanium powder for industrial
manufacturing processes in the aviation industry. A memorandum of understanding (MoU) that seeks to
advance research synergies and pull resources between the two organisations with the aim of using
titanium powder in industrial manufacturing, particularly in making aircraft components and spare parts was
signed between the CSIR and Boeing in June 2013. The titanium pilot plant which is expected to produce
about 500 t/y of titanium metal powder, launched in a partnership between CSIR and the Department of
Science and Technology, will assist in the up-scaling of the technology and the agreement with Boeing.
EMPLOYMENT
Total employment in titanium sector fell 2.8 percent to 6 335 employees in 2013 compared with 2012 due
to retrenchment at Tisands mine resulting in a 34.4 percent decline in total earnings to R1.37 billion (Table
61).
TABLE 61: EMPLOYMENT AND REMUNERATION IN THE TITANIUM SECTOR IN 2013
YEAR EMPLOYEE REMUNERATION
Number R'000 Per Capita Earnings
2009 6825 1 373 855 201
2010 7154 1 578 092 221
2011 6324 1 805 121 285
2012 6503 2 092 252 322
2013 6 335 1 373 440 217
Sources: DMR, Directorate Mineral Economics
151
While female employment increased by 4.3 percent in 2013, the total female workforce constituted only 12
percent of the entire titanium sector employment. Per capita earnings increased by 32.6 percent in 2013
due to retrenchments.
OUTLOOK
According to TZMI, modest recovery in the TiO2 industry is expected in 2014. Emerging markets demand
growth will drive titanium dioxide pigment capacity growth over the next decade. Global TiO2 demand is
expected to grow by 5 percent in 2014 due to re-stocking of inventories, continued recovery of consumer
demand in developed economies and steady growth in emerging economies. A similar growth pattern as in
2014 is expected in 2015 as global demand recovers and inventory levels fall in line with mid-cycle levels.
It is expected that net global capacity growth was modest in 2013 and is expect to remain stable in 2014
due to slow addition and the permanent shutdown of some smaller plants in China, according to TZMI. It is
however expected to increase from 2015 with announcements of new capacity from various Chinese
producers in 2015 and 2016. The imminent capacity increase will have impact negatively on feedstock
prices, with predictions of unlikely increase in ilmenite prices and a fall rutile in 2014 and 2015.
Demand for titanium metal in aerospace is expected to grow significantly over the coming decade as next
generation aircrafts replace less efficient legacy models. According to RTI International Metals Inc, there
was a record backlog order levels for commercial aircrafts globally, a development which could increase
the demand for titanium metal in the aerospace industry. Titanium fits well with the new generation of
commercial aerospace design strategies, given the operating efficiency mandates to reduce fuel
consumption. Also, the projected global passenger growth rate and the replacement of older, less fuel-
efficient aircraft are other factors boosting build rates for the near term.
Demand for titanium metal is projected to grow by approximately 6 percent per annum compounded
annually, according to various estimates, mainly due to the expected increase in consumption of the metal
in the commercial aircraft sector and industrial applications. The new generation of aircrafts such as
Boeing‟s and Airbus, are using incremental content of titanium. The need for lighter aircrafts presents
opportunities for titanium mining and beneficiation in South Africa. The mutually beneficial agreement
between CSIR and Boeing will hugely complement the CSIR's drive towards commercialisation of its
titanium technologies followed by the establishment of the titanium industry and related industries. This in
turn, will support the country‟s long-term economic development goals in line with the country‟s
Beneficiation Strategy and the National Development Plan.
152
REFERENCES
1. Industrial Minerals publications, various articles in 2013 - 2014.
2. Metal Bulletin, Prices, 2012 – 2014
3. U.S. Geological Survey, Mineral Commodity Summaries, Titanium, 2014.
4. TZ Minerals International TiO2 pigment annual review 2014
5. http://www.merrion-capital.com/
6. http://www.miningweekly.com/article/tormin-mineral-sands-project-kicks-off-to-inject-r1bn-a-year-2014-02-06
7. http://www.mineralcommodities.com/projects/tormin-mineral-sands/
8. http://www.mining-technology.com/news/newstronox-gets-planning-approval-for-fairbreeze-mine-4187654
9. www.iluka.com, various articles
10. http://www.southafrica.info/about/science/titanium-130613.htm#.VFihWZVO7IU
153
ZINC
Silungiselelo Mnyameni
SUPPLY DEMAND
In 2013, world zinc reserves were estimated at 250 Mt. Australia hosted the world‟s largest zinc reserves
accounting for 25.6 percent, followed by China (17.2 percent) and Peru (9.6 percent). South Africa, with 6
percent of the world zinc reserves, ranked 5th position (Table 62). World zinc mine production decreased
by 2.3 percent to 13.19 Mt in 2013 compared with 13.51 Mt in 2012. This was mainly due to a loss of
output emanating from the closure of Glencore-Xstrata‟s Brunswick and Perseverance mine in Canada.
The closure of these mines resulted in a loss of over 300 kt of zinc output while South Africa‟s production
decreased by 18.9 percent. Africa collectively accounted for 2.5 percent (333 kt) of the world total.
Namibia, at 215 kt, had the continent‟s largest zinc mine production followed by Morocco‟s 39 kt, Burkina
Faso‟s 32 kt and South Africa‟s 30 kt.
TABLE 62: WORLD RESERVES, MINE PRODUCTION AND EXPORTS OF ZINC, 2013
COUNTRY RESERVES PRODUCTION EXPORTS*
Mt % Rank kt % Rank kt % Rank
Australia 64 25.6 1 1 524 11.5 2 428 10.1 2
Canada 7 2.8 8 419 3.2 7 524 12.4 1
China 43 17.2 2 4 730 35.8 1 3 0.1 9
India 11 4.4 6 793 6 4 195 4.6 5
Ireland 1.3 0.52 9 327 2.5 10 0 0 -
Kazakhstan 10 4 7 417 3.2 8 243 5.8 4
Mexico 18 7.2 4 643 4.9 6 179 4.2 6
Namibia X - - 215 1.6 13 X X X
Peru 24 9.6 3 1 351 10.2 3 309 7.3 3
South
Africa 15 6 5 30 0.2 27 0 0 -
USA 10 4 7 777 5.9 5 19 0.5 8
Other 46.7 18.7 - 1 970 14.9 - 2 294 54.4 -
Total 250 100 13 196 100 4 220 100
Sources: ILZSG, October 2014
USGS, February 2014
DMR, Directorate Mineral Economics
Note: * World Bureau of Metal Statistics, Exports of Slab Zinc
X Not specified but estimate have been included in other countries
South Africa‟s zinc mine production decreased by 18.9 percent to 30 kt in 2013 compared to 37 kt recorded
in 2012 (Table 63). This was due to lower head grade throughout the year as well as higher production
costs as a result of depressed zinc prices which prompted producers to curb production until prices were
154
favourable. As a consequence of reduced production levels, unit costs will eventually increase resulting to
even higher production costs. Export sales also decreased by 31.6 percent to 26 kt compared with export
sales recorded in 2012. No local sales have been recorded since 2012 after the closure of Zincor refinery
in 2011. The balance of 4 kt of stock has been kept for future use.
TABLE 63: SOUTH AFRICA‟S PRODUCTION AND SALE OF ZINC METAL IN CONCETRATE 2004-2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Mass Value (FOR) Mass Value (FOB)
kt kt R‟000 R/t kt R‟000 R/t
2004 32 31 107 630 3 415 - - -
2005 32 31 144 752 4 640 - - -
2006 34 33 133 500 4 444 - - -
2007 31 30 428 959 14 114 - - -
2008 29 27 221 725 8 150 - - -
2009 28 22 170 925 7 603 - - -
2010 36 31 279 821 9 054 4 43 393 11 892
2011 37 17 169 416 9 917 20 233 150 11 775
2012 37 - - - 38 444 536 10 715
2013 30 - - - 26 335 687 12 487
Sources: DMR, Directorate Mineral Economics
Global refined zinc metal output increased by 2.2 percent to 12.87 Mt in 2013, compared with 12.59 Mt
recorded in 2012. This was due to higher output from China, which accounts for 39.6 percent to the world
total. Additional output was mainly due to increased capacity in Italy resulting from the expansion of the
Glencore Xstrata‟s 110 kt capacity plant at Porto Vesme in Sardinia, to 140 kt per year, the restart of zinc
plant at La Oroya in Peru and the recovery of output in India after weaker output in 2012. Regionally, Asia
dominated zinc metal production contributing 62 percent to total output followed by Europe‟s 19 percent
and America‟s 14 percent (Fig. 1). Africa‟s refined zinc production decreased by 12.6 percent to 146 kt in
2013 compared with 167 kt in 2012, accounting for 1.1 percent of the global production.
155
FIGURE 48: REGIONAL PRODUCTION OF REFINED ZINC, 2013
Sources: International Lead and Zinc Study Group, October 2013
World refined zinc consumption rose by 5.5 percent to 12.98 Mt in 2013, compared with the 12.3 Mt
recorded in 2012. China‟s usage, which accounts for 44.3 percent of total world demand, rose by 8.6
percent following a decrease in 2012. This was stimulated by the recovery of the automobile industry.
Regionally, Asia continued to dominate global zinc consumption accounting for 66.1 percent followed by
Europe‟s 18.1 percent and America‟s 13.2 percent (Fig. 2). Africa‟s consumption increased by 7.1 percent
to 166 kt in 2013, accounting for 1.3 percent to global zinc usage. South Africa dominated the continent‟s
consumption accounting for 43.4 percent to Africa‟s zinc usage, followed by Algeria at 11.4 percent.
FIGURE 49: REGIONAL CONSUMPTION OF REFINED ZINC, 2013
Sources: International Lead and Zinc Study Group, October 2013
Europe 19%
America 14%
Asia 62%
Other 5%
Europe 18%
America 13%
Asia 66%
Other 3%
156
PRICES
Prices were on a narrow range throughout 2013, due to market surplus. The annual London Metal
Exchange (LME) zinc prices averaged $1 912.33/t, a 1.7 percent decrease compared with 2012. The
lowest zinc cash settlement on average was recorded in May 2013, at $1 829.02/t while the maximum
price on average was recorded in February 2013, at $2 129.28/t (Fig. 3). LME warehouse stock levels
decreased at a rapid rate into the last quarter of 2013, pushing prices up as a result of gradual
improvement in the key consuming sectors and the global market demand recovery.
FIGURE 50: LME ZINC CASH SETTLEMENT PRICES (MONTHLY AVERAGES), 2013
Sources: London Metal Exchange (LME)
In South Africa, the zinc unit price increased by 16.5 percent to R12 487/t in 2013 compared with 2012
(Table 63), indicating a global zinc market recovery and rising price levels. Regardless of the increase in
unit prices, revenues generated decreased by 24.5 percent to R335 million in 2013. This was due to a
decrease in production recorded which availed less for export.
EMPLOYMENT
Total employment in South Africa‟s zinc mines increased by 8.6 percent to 1 437 in 2013 compared with
1 323 employees in 2012, resulting in 11.5 percent increase in total earnings to R205 million (Table 64).
1700
1850
2000
2150
2300
2450
Jul-12
Aug-1
2
Sep-1
2
Oct-
12
Nov-1
2
Dec-1
2
Jan-1
3
Fe
b-1
3
Mar-
13
Apr-
13
May-1
3
Jun-1
3
Jul-13
Aug-1
3
Sep-1
3
Oct-
13
Nov-1
3
Dec-1
3
Jan-1
4
Fe
b-1
4
Mar-
14
Apr-
14
May-1
4
Jun-1
4
Jul-14
Pri
ces $
/t
Period
157
TABLE 64: EMPLOYMENT AND REMUNERATION IN SOUTH AFRICA‟S ZINC MINES IN 2013
YEAR EMPLOYEE REMUNERATION PRODUCTION
Number R'000 Average Earnings
R
Labour Productivity
t
2009 2 020 144 605 71 587 14
2010 1 893 156 456 82 650 19
2011 1 312 167 552 127 707 28
2012 1 323 184 164 139 212 28
2013 1 437 205 403 142 939 21
Sources: DMR, Directorate Mineral Economics
Per capita earnings increased by 2.7 percent in 2013 indicating an improvement of salary levels. The
number of female employees also rose by 11.4 percent to 196 compared with 176 employees in 2012. A
decrease in zinc mine production due to low head grade throughout the year resulted in 25 percent
decrease in employee‟s productivity. Productivity decreased to 21 t/employee compared with 28
t/employee in 2012.
DEVELOPMENTS
Black Mountain Mine, a subsidiary of Vedanta Resource plc, in Aggeneys, Northern Cape Province of
South Africa, is currently exploiting additional resources to increase South Africa‟s zinc production.
Swartberg Mine is seen as one of the most strategic assets of the Black Mountain Mine since it is expected
to extend the life of mine by 15 years and approximately 300 new jobs will be created. Pre-feasibility
studies investigating a stand–alone Swartberg option started in 2013 and are currently underway. The
mine was opened in May 2014, currently a small operation mining at approximately 20 kt a month is in
operation. The mine plans to reach full production by 2016 as an open pit operation that will later evolve
into an underground operation. The mine contains economic concentrations of zinc, lead, copper and
silver. It is expected to produce 300 kt of ore per annum initially, ramping up to 2.4 Mt of ore per annum
when it reaches full underground production capacity after six years.
OUTLOOK
World mine production is expected to increase by 2 percent to 14.01 Mt in 2014, following a 1.6 percent
increase in 2013, according to the International Lead and Zinc Study Group (ILZSG). This is primarily as a
result of a 2.5 percent increase expected from China. Additional supply growth is expected from re-opening
of Glencore Xstrata‟s 90 kt per annum capacity Bracemac McLeod operation in Canada, which
commenced production in May 2013.
World refined zinc metal output is expected to increase by 2.9 percent to 13.25 Mt in 2014 and a further 3.3
to 13.68 Mt in 2015, mainly driven by higher output in China. Additional output is expected from Italy,
158
Japan and the Republic of Korea due to recent commissioning of new capacity. The new 160 kt per year
capacity zinc plant in Mooresboro, North Carolina in the US, which started operating in May 2014, is one of
the key producers of the special high-grade (SHG) zinc as well as continuous-galvanising grade (CGG).
World refined zinc consumption is anticipated to increase by 5.1 percent to 13.65 Mt in 2014 and a further
2.9 percent to 14.05 Mt, due to a 7 percent expected increase in China‟s demand driven by increased
automobile production, growth in galvanised steel sheet output as well as white goods production. Demand
in the US is also expected to rise due to increased automobile production while a recovery in Europe,
especially in Belgium, Italy and Poland is forecast to drive the zinc metal consumption up.
After six successive years of market surplus, refined zinc supply shortfall is anticipated to be about 403 kt
in 2014 and 3 Mt in the next three years, according to ILZSG. This deficit is forecast to be driven by the
closure of major zinc mines reducing global supply growth and the continual increase in global demand.
This is expected to urge prices up in the long term as the start-up of new and expanded mining capacity is
delayed. LME stock levels have been declining at a higher rate into the second half of 2013, as a result of
increasing demand from the key consuming sectors. The improvement of the auto industry in the US and
China is likely to apply upward pressure on prices while mine output is constrained with no quick solutions.
South Africa‟s zinc mine production could benefit from the above stated market situation as it favours the
development of the Gamsberg project, which has been on hold due to lower zinc prices. Black Mountain
Mine conducted a feasibility study to develop new zinc mine (Gamsberg) which proved not viable at a zinc
price below $2 500/t. This project and the Swartberg Mine could help increase the country‟s zinc output
pushing it higher in the production rankings.
REFERENCES
1. Creamer Media: Base Metals Report, December 2013
2. International Lead and Zinc Study Group, Monthly Bulleting Lead and Zinc Statistics, October 2014.
3. International Lead and Zinc Study Group, April Session/Forecast, April 2014
4. htt://www.metalbulletin.com
5. U.S. Geological Survey, Mineral Commodity Summaries, February 2014
6. DMR, Mineral Economics Directorate
7. World Bureau of Metal Statistics May 2014
159
ZIRCON
Mathabo Ikaneng
SUPPLY – DEMAND
Global zircon reserves were estimated at 67 Mt in 2013. Australia, with 59.7 percent, hosts the largest
reserves, followed by South Africa‟s 20.9 percent and India‟s 5.1 percent. In 2013, world production of
zircon declined by to 1.3 percent to 1.44 Mt compared with 2012 as producers adjusted supply in response
to rising stockpiles emanating from slowing demand resulting from global economic slowdown (Table 65).
Global zircon production was dominated by Australia (41.7 percent) and South Africa (25.0 percent), which
together accounted for two-thirds of the total global output. Zircon supply is consolidated amongst three
producers who account for two thirds of global production, which are Tronox, Rio Tinto and Iluka
Resources.
TABLE 65 – WORLD RESERVES AND MINE PRODUCTION OF ZIRCON CONCENTRATES, 2013
RESERVES PRODUCTION
COUNTRY Mt % Rank kt % Rank
Australia 40.0 59.7 1 600 41.7 1
China 0.5 0.8 5 140 9.7 3
India 3.4 5.1 3 40 2.8 6
Indonesia na na na 120 8.3 4
Mozambique 1.1 1.6 4 65 4.5 5
South Africa 14.0 20.9 2 360 25.0 2
USA 0.5 0.8 5 na na na
Other 7.2 10.8
110 7.6
TOTAL* 2013 67.0 100.0 1 440 100.0
2012 48.0 100.0 1 460 100.0
Source: USGS, January 2014, p 189
*Totals are rounded
The use of zircon in some key markets, including traditional ceramics and foundries, has for several years
been affected by substitution from competing minerals such as alumina in ceramics. This was exacerbated
by the record high prices seen in 2011 through to 2012, which negatively impacted on zircon demand.
Overall zircon demand recovered in 2013, amid strong demand from China and North America, and on
signs of a recovery in Europe‟s ceramics sector, although the recovery was uneven across geographical
markets and end user sectors. Also, growth in developing countries where growth in urban population and
floor space translates to increased consumption in minerals such as zircon contributed to demand growth
in 2013. The majority of this growth was from China, India and Latin America, while improvements in the
construction sector and a booming hotel industry have also driven consumption up and production of
ceramics in the Middle East.
160
FIGURE 51: GLOBAL CONSUMPTION OF ZIRCON BY SECTOR IN 2013
Source: Kenmare Resources and other sources
Zircon is mainly used in ceramics as a pacifier in floor tiles, sanitary ware, and tableware. Ceramics remain
the biggest end-user of zircon; accounting for 57 percent of consumption, followed by chemicals (22
percent), refractories (10 percent) and foundry is 11 percent, (Fig. 1).
PRICES
Zircon prices commenced the year lower than in 2012 and remained stable for much of the year, with a
resultant weighted average price of A$ 1 514.6/t for 2013 as the market remained oversupplied and
economies slowed down (Fig. 2). The average price of zircon began the year at A$2 500/t in January
before falling by 33 percent to A$1 675/t in February and a further 16 percent to A$ 1 400/t in March.
Zircon prices stabilized at around the A$ 1 400/t for the rest of the year.
Ceramics 57%
Chemicals 22%
Refractories 10%
Foundry 11%
161
FIGURE 52: PRICES FOR FOUNDRY GRADE ZIRCON, FREE ON BOARD AUSTRALIA, 2013 – 2014
Source: Metal Bulletin, 2013 – 2014
Zircon prices fell further at the beginning of 2014, beginning the year at A$ 1 228.6/t in January and by
June, zircon was trading at A$ 1 150/t.
DEVELOPMENTS
Production commenced at Tormin mine, which is located 400 km north of Cape Town, Western Cape
Province. Tormin mine, which is owned by Mineral Commodities (MRC), an Australian-based company, is
expected to have a capacity of 1.2 Mt per annum producing about 47.8 kt of concentrate per annum
grading at 81 percent zircon, 11.6 percent rutile and more than 100 kt per annum ilmenite. The life of mine
(LOM) mine is expected to be between 3 and 5 years. By December 2013, the company had accumulated
stockpile of 60 kt of heavy mineral sands ready to be processed. The company is planning to export the
concentrate produced to China, in terms of an offtake agreement, where it would be processed further to
produce final zircon and rutile, while ilmenite produced will be beneficiated locally.
Also, MRC has recently acquired the rights to the offshore area adjacent to the Tormin Mine. This area is
the source of Tormin ore body and, supported by the J-bay features of the area and supports the concept
of replenishment mining which will substantially extend the Tormin life of mine
The Fairbreeze Mine in the KwaZulu-Natal Sands region, which is being developed to serve as a
replacement to the Hillendale Mine in the same region, was expected to start up in the first half of 2015.
Fairbreeze Mine is expected to have a LOM of between 12 - 15 years, and a planned annual capacity of
500 kt ilmenite and 60 kt zircon. More information on these South African mine sands projects is covered in
the titanium chapter, as zircon is a co-product of titanium mining
0.00
500.00
1000.00
1500.00
2000.00
2500.00
3000.00
Jan-1
3
Fe
b-1
3
Mar-
13
Apr-
13
May-1
3
Jun-1
3
Jul-13
Aug-1
3
Sep-1
3
Oct-
13
Nov-1
3
Dec-1
3
Jan-1
4
Fe
b-1
4
Mar-
14
Apr-
14
May-1
4
Jun-1
4
A$/t
Months
162
Richards Bay Minerals (RBM) has received the green light from its owner Rio Tinto to start with a feasibility
study of the R5 billion Zulti South expansion project to start the development of the company‟s new sands
minerals mine. Running along the coast near eSikhawini, in KwaZulu-Natal province, the company will
mine heavy mineral sands including titanium minerals, pig iron and zircon. The Zulti-South‟s Phase1 will
include infrastructure development and a 2 500 tonnes per hour (tph) dry mining operation forecast to
come on-stream in the first quarter of 2017. Phase 2 will allow 1 250 tph dry mining by 2021.
OUTLOOK
According to JP Morgan, the zircon market was oversupplied and producers curtailed production in order to
run inventories levels down in 2013. However, the market is expected balance out in 2014 and to move
back into deficit between 2015 and 2016. With visible signs that the zircon market has reached the bottom
of the cycle and turning towards firm recovery in 2014, demand that started declining dramatically in 2011,
is expected to grow at an average of 3.7 percent a year between 2014 and 2019. Emerging markets are
expected to drive future growth, and demand from Western Europe and China is anticipated to return as
well.
Although the ceramics sector is zircon‟s largest end-market Roskill predicts that the chemicals sector will
see the highest growth rate at 4.1 percent per annum, followed closely by ceramics. Lower growth rates
are projected for demand into the foundries and refractories sectors.
It is expected that zircon prices will be maintained by higher demand and stability is anticipated in the latter
part of 2014. Prices are expected to firm slightly in 2015, after the stock levels have been run down, higher
sales and demand could encourage stronger prices.
The Tormin mine sands project and Fairbreeze Mine are expected to increase South Africa‟s contribution
to global zircon output in the short term. The positive outlook for zircon in the short to medium term bodes
well for the country‟s heavy mineral sands industry and foreign exchange, taking into account that South
Africa is the second largest producer of zircon in the world.
REFERENCES
1. Metal Bulletin, various articles, 2013 -2014.
2. Industrial Minerals publications, 2013 - 2014
3. U.S. Geological Survey, Mineral Commodity Summaries, Zircon, January 2014
4. http://www.zircomet.com/news/11170/Zircon-markets-signal-steady-recovery-by-end-of-2014/
5. http://www.bloomberg.com/news/2013-07-17/iluka-says-2013-zircon-sales-to-top-production-on-china-demand.html
6. http://zululandobserver.co.za/28393/more-mineral-mining-southboubd
163
FERROUS METALS AND MINERALS OVERVIEW
L Malebo
SUPPLY AND DEMAND
South Africa is a major producer and supplier of primary ferrous minerals and their alloys. With more than
85 percent of global consumption of iron ore, manganese, chrome and vanadium; steel manufacturing is by
far the leading demand driver of ferrous minerals. According to the World Steel Association (WSA), global
crude steel production increased by 3.0 percent to 1 606 Mt in 2013, compared with 2012. China remained
the dominant stainless steel producer, accounting for 48.5 percent of the world‟s total stainless steel output
in 2013, followed by Japan and the US at 6.9 percent and 5.4 percent, respectively. China and Japan‟s
crude steel production increased by 6.6 percent and 3.2 percent, respectively, while the US production
declined by 2.1 percent in 2013. South Africa‟s crude steel production amounted to 7.2 Mt in 2013, a 4.3
percent rise when compared with 2012.
TABLE 66: SOUTH AFRICA‟S PRODUCTION AND SALES OF FERROUS MINERALS, 2013
COMMODITY YEAR PRODUCTION LOCAL SALES EXPORT SALES TOTAL SALES
kt kt R million kt R million kt R million
CHROME
ORE
2013 13 653 8 473 5 866 4 168 5 891 12 641 11 758
2012 11 310 6 685 4 683 2 470 3 594 9 155 8 277
IRON ORE 2013 71 534 9 259 5 746 58 202 57 385 67 461 63 131
2012 67 100 8 393 4 448 57 110 48 193 65 503 52 642
MANGANESE
ORE
2013 11 056 3 425 1 569 7 631 12 513 11 056 14 082
2012 8 943 1 445 1 135 7 498 9 686 8 943 10 821
TOTAL 2013 96 243 21 157 13 181 70 001 75 789 91 158 88 971
2012 87 373 16 524 9 133 67 094 51 800 83 618 60 933
Source: DMR, Directorate Mineral Economics
South Africa‟s aggregated production of ferrous minerals increased by 10.1 percent to 96 243 kt (Table 66).
Total sales revenues of primary ferrous minerals amounted to R 88.9 billion contributing 22.9 percent to South
Africa‟s total mineral sales. Iron ore contributed 74 percent to ferrous minerals total production, followed by
chrome ore and manganese ore at 14 percent and 11 percent, respectively. Ferrous minerals local sales
volume increased by 28 percent due to increased local chromium alloy production capacity utilization. South
Africa‟s chromium alloy production grew by 5.1 percent to 3 219 kt in 2013, compared with 2012, while
manganese alloy production declined by 3.5 percent to 681 kt (Table 67). Despite a 3.1 percent drop in the
ferroalloy total sales volume and weak ferroalloy prices, corresponding revenues increased by 23.5 percent in
2013 compared with 2012, due to increases in manganese alloy local sales volume and chromium alloy export
mass in the same period.
164
TABLE 67: SOUTH AFRICA‟S PRODUCTION AND SALES OF FERROALLOYS, 2013
COMMODITY YEAR
PRODUCT
ION LOCAL SALES EXPORT SALES
TOTAL
SALES
kt kt R million kt R million kt R million
CHROMIUM
ALLOYS
2013 3 219 360 2 983 2 802 25 552 3 162 28 535
2012 3 063 443 3 402 2 745 22 290 3 188 25 693
MANGANESE
ALLOYS
2013 681 58 496 493 4 113 551 4 609
2012 706 33 263 523 3 961 556 4 224
TOTAL 2013 3 900 418 3 479 3 295 29 665 3 713 33 144
2012 3 852 533 4 104 3 301 22 731 3 834 26 836
Source: DMR, Directorate Mineral Economics
EMPLOYMENT
Employment in the ferrous mineral‟s sector declined by 4.7 percent to 49 425 (Table 68), as the number of
contract employees declined particularly in the iron and chrome sectors. Employment in the iron ore and
chrome sector dropped by 9.4 percent and 7 percent respectively, while in the manganese sector it
increased by 13.2 percent. Total remuneration increased by 9.5 percent in 2013 compared with 2012,
resulting in a 14.9 percent increase in the average remuneration per employee.
TABLE 68: SOUTH AFRICA‟S FERROUS MINE EMPLOYMENT AND GROSS REMUNERATION 2009-
2013
YEAR
AVERAGE
NUMBER OF
EMPLOYEES
TOTAL
REMUNERATION
(R'000)
AVERAGE
REMUNERATION
R/employee
2009 31 003 4 745 558 153 067
2010 39 459 6 524 615 165 351
2011 46 713 10 536 930 225 567
2012 51 864 9 692 127 186 875
2013 49 425 10 619 477 214 860
Source: DMR, Directorate Mineral Economics
165
OUTLOOK
According to the World Steel Association 2014, global crude steel demand is forecast to grow at about 3.3
percent reaching 1 659 Mt, with more demand growth expected to come from outside of China due to that
country‟s slow economic growth. World stainless steel production is projected to rise by 9.2 percent to 41.6
Mt in 2014, with China‟s output expected to increase by 13.2 percent during the same period. China‟s steel
production and consumption is expected to remain the demand driver of global ferrous minerals and their
alloys. Weak ferrous minerals and ferroalloys prices are expected in 2014 into 2015, due to an
oversupplied market as well as lower demand. Furthermore, price trends are expected to depend on
economic developments in emerging Asia, especially China. South Africa‟s planned infrastructure
programme is expected to boost ferrous minerals and ferroalloy production for local consumption.
REFERENCES:
1. DMR Mineral Economics, 2013
2. USGS Mineral Commodity Summaries, January 2014
3. www.worldsteel.org, Monthly Steel Statistics
166
CHROMIUM
S. Ntshobane
SUPPLY – DEMAND
Global chromite reserves were estimated at 9 106 million tons (Mt) in 2013 (Table 69), with South Africa
accounting for 74.1 percent, followed by Zimbabwe and Kazakhstan at 10.2 percent and 4.2 percent,
respectively. Global chrome ore production amounted to 28.0 Mt in 2013, a 7.9 percent increase compared
with 2012. South Africa remained the leading producer accounting for 48.8 percent of total world chrome
ore output, followed by Kazakhstan and India at 14.3 percent and 9.1 percent, respectively.
World chrome ore exports amounted to 14.3 Mt in 2013, a 22.2 percent increase compared with 2012.
South Africa was the leading exporter contributing 53.2 percent, followed by Turkey and Kazakhstan at 15
percent and 7.4 percent, respectively. Higher exports were attributed to an increase in exports from South
Africa, Kazakhstan and Oman, amongst others. South Africa‟s exports increased by 38.2 percent in 2013,
with Kazastan and Oman increasing by 24.1 percent and 56.1 percent, respectively. Global chrome ore
imports stood at 28.5 Mt, a 22.9 percent increase compared with 2012. China remained the leading
consumer of chrome globally, contributing over 40 percent to global imports. The country‟s chrome ore
imports grew by 30.1 percent to 12.1 Mt in 2013, with over 50 percent of its total ore requirements sourced
from South Africa.
TABLE 69: WORLD CHROME ORE RESERVES, PRODUCTION AND EXPORTS, 2013
COUNTRY RESERVES+ PRODUCTION# EXPORTS#
Mt % Rank kt % Rank kt % Rank
South Africa 6 751 74.1 1 13 653* 48.8 1 7 663 53.2 1
Kazakhstan 387 4.2 3 3 992 14.3 2 1 069 7.4 3
India 54 0.6 6 2 558 9.1 3 181 1.3 9
Turkey 220 2.4 4 2 478 8.9 4 2 158 15.0 2
Finland 120 1.3 5 979 3.5 5 2 0.0 11
Oman 27 0.3 9 869 3.1 6 842 5.9 4
Albania 9 0.1 10 558 2.0 7 677 4.7 5
Pakistan - - - 526 1.9 8 492 3.4 6
Brazil 18 0.2 7 484 1.7 9 37 0.3 10
Iran - - - 428 1.5 10 428 3.0 7
Zimbabwe 930 10.2 2 335 1.2 11 0 0.0 12
Australia - - - 286 1.0 12 407 2.8 8
Russia 46 0.5 8 240 0.9 13 0 0.0 12
Other 626 6.1
575 2.1
437 3.0
TOTAL: 2013 9 106 100
27 961 100
14 393 100
2012 9 106
25 918 11 310
11 775
Source: +Heinz H. Pariser, 2014, # International Chromium Development Association, 2014, * Directorate Mineral Economics, DMR
167
South Africa‟s chrome ore production increased by 20.7 percent to 13.7 Mt in 2013 compared with 2012
(Table 70). The sharp spike was attributed to the improved data reporting compliance by UG2 producers.
South Africa‟s total chrome ore sales mass increased by 38.1 percent to 12.6 Mt in 2013, boosted by an
increase in both the export and local sales mass in 2013. Export sales mass increased by 68.7 percent to
4.1 Mt, due to higher demand from the global ferrochrome sector. Local sales mass increased by 26.7
percent due to stronger local ferrochrome demand, post the Government‟s intervention to discontinue the
energy buyback programme between Eskom and Ferrochrome producers, which incentivised shutting
down furnaces in 2012.
TABLE 70: SOUTH AFRICA‟S CHROME ORE PRODUCTION AND SALES, 2004 – 2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Value Unit Value Mass Value Unit Value
Kt kt R' 000 R/t kt R' 000 R/t
2004 7 677 6 743 1 368 846 203 513 318 893 622
2005 7 552 6 128 1 468 521 240 657 442 045 673
2006 7 418 6 384 1 802 385 282 735 499 519 679
2007 9 665 7 389 2 346 982 315 904 675 901 747
2008 9 683 7 116 4 131 019 581 762 1 267 931 1 664
2009 6 865 4 855 2 066 278 426 1 035 1 196 051 1 155
2010 10 871 7 267 4 159 308 572 1 929 2 459 473 1 275
2011 10 824 8 061 5 813 803 721 2 063 3 357 662 1 628
2012 11 310 6 685 4 683 023 701 2 470 3 594 282 1 455
2013 13 653 8 473 5 866 471 692 4 168 5 891 833 1 414
Source: DMR Directorate Mineral Economics, 2014
Approximately 94.2 percent of global chrome output is consumed in ferrochrome production, with chemical
and foundry sands applications consuming only 3.3 percent and 2.2 percent, respectively. Stainless steel
and alloy steels are the key demand drivers of ferrochrome and account for more than 90 percent of total
world ferrochrome supply. Global stainless steel production increased by 7.8 percent to a record 38.1 Mt in
2013 compared with 2012, mainly due to an 18.0 percent increase in China‟s stainless steel output.
China‟s dominance of the stainless steel market increased in 2013 with the country accounting for 49.8
percent of the world‟s total stainless steel output in 2013 (Figure 53).
Global ferrochrome production grew by 9.8 percent to 10.8 Mt in 2013, due to significant production
increases in China, Finland and South Africa (Table 71). China and South Africa jointly accounted for
approximately two-thirds of total global output. China, at 36.9 percent, remained the world‟s leading
ferrochrome producer with output increasing by 14.4 percent in 2013. South Africa‟s share of global
ferrochrome market declined to 28.9 percent even though the country‟s ferrochrome output increased by
5.1 percent in 2013. Ferrochrome exports increased by 1.5 percent to 5.6 Mt in 2013 compared with 2012.
South Africa, at 50.3 percent, remained the largest ferrochrome exporter, followed by Kazakhstan and
India at 17.3 percent and 9.9 percent, respectively. China‟s ferrochrome imports increased by 20.4 percent
168
to 1.8 Mt in 2013, with South Africa providing nearly one million tonnes; more than half of China‟s total
ferrochrome imports during the period.
FIGURE 53: WORLD‟S LEADING STAINLESS STEEL PRODUCERS, 2013
Source: International Stainless Steel Forum, 2014
TABLE 71: WORLD FERROCHROME PRODUCTION AND SALES, 2013
COUNTRY PRODUCTION# EXPORTS#
kt % Rank kt % Rank
China 3 982 36.9 1 27 0.5 9
South Africa 3 219 29.8 2 2 802 50.3 1
Kazakhstan 1 156 10.7 3 961 17.3 2
India 974 9.0 4 551 9.9 3
Russia 465 4.3 5 261 4.7 4
Finland 434 4.0 6 219 3.9 5
Brazil 161 1.5 7 17 0.3 11
Zimbabwe 148 1.4 8 127 2.3 6
Turkey 142 1.3 9 109 2.0 7
Sweden 50 0.5 10 39 0.7 8
Albania 16 0.1 11 24 0.4 10
Other 43 0.4
431 7.7
TOTAL: 2013 10 789 100
5 567 100
2012 9 827
5 484
Source: DMR Directorate Mineral Economics, 2014
South Africa‟s ferrochrome production grew by 5.1 percent to 3.2 Mt in 2013 (Table 72), mainly due to
rising local ferrochrome production capacity utilization following government intervention of ending the
energy buyback programme, between Eskom and the ferrochrome producers. Domestic ferrochrome sales
volumes declined by 18.7 percent to 360 kt in 2013; corresponding with a 2.2 percent drop in local
50%
25%
8%
6% 6% 5%
China Others Japan India South Korea United States
169
stainless steel output during the period. Export sales volumes increased by 2.1 percent to 2.8 Mt in 2013
compared with 2012, due to increased demand from china and lower demand from the local stainless steel
industry.
TABLE 72: SOUTH AFRICA‟S FERROCHROME PRODUCTION AND SALES, 2004 – 2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Value Unit Value Mass Value Unit Value
kt kt R' 000 R/t kt R' 000 R/t
2004 3 032 484 1 856 496 3 836 2 646 10 109 639 3 821
2005 2 802 358 1 421 676 3 968 2 480 9 923 290 4 001
2006 3 030 353 1 352 224 3 832 2 581 10 370 421 4 017
2007 3 561 395 1 995 161 5 047 2 972 15 534 184 5 227
2008 3 269 334 3 415 822 10 227 2 525 28 355 767 11 230
2009 2 346 432 2 252 973 5 215 2 621 15 881 599 6 059
2010 3 607 397 2 851 837 7 183 3 116 24 216 069 7 772
2011 3 422 448 3 413 684 7 620 3 037 23 738 853 7 817
2012 3 063 443 3 402 210 7 677 2 745 22 290 876 8 120
2013 3 219 360 2 983 322 8 286 2 802 25 552 642 9 120
Source: DMR Directorate Mineral Economics, 2014
PRICES AND REVENUES
The impact of the oversupply due to the UG2 chrome in the market was evident in the chrome ore price,
which fell by 8.9 percent in 2013 to $185/t compared with 2012 (Figure 54). UG2 chrome prices declined
by 13 percent to $154/t in the same period. The drop in chrome ore and UG2 prices continued to have a
negative impact on ferrochrome prices, which also declined by 1.7 percent in 2013 despite higher global
stainless steel production. Despite a drop in the chrome ore and ferrochrome prices in 2013, chrome ore
and ferrochrome total sales revenue increased by 42.2 percent and 11.0 percent, respectively, due to
higher total sales mass in 2013 compared with 2012.
170
FIGURE 54: CHROME ORE AND FERROCHROME PRICES, 2013
Source: CRU Mining Group, 2014
EMPLOYMENT
Employment in South Africa‟s chrome industry fell by 7.0 percent to 18 374 in 2013 compared with 2012,
while remuneration increased by 12.1 percent (Table 73). The decrease in employment resulted from a
15.9 percent drop in the number of contractors from 8 598 in 2013 to 7 225 in 2012, while permanent
employees only dropped by 0.2 percent in the same period. Total remuneration increased by 12.1 percent
in 2013 compared with 2012, resulting in a 20.6 percent increase in the average remuneration per
employee.
TABLE 73: EMPLOYMENT IN SOUTH AFRICA‟S CHROME INDUSTRY, 2013
YEAR EMPLOYEES TOTAL REMUNERATION AVERAGE REMUNERATION
R' 000 R/employee
2009 10 966 1 457 367 132 898
2010 13 982 2 082 481 148 940
2011 16 911 2 754 694 162 893
2012 19 758 3 430 889 173 645
2013 18 374 3 848 722 209 465
Source: DMR Directorate Mineral Economics, 2014
KEY DEVELOPMENTS
Phase II of the Lion ferrochrome plant project is expected to increase the Glencore-Merafe chrome
venture‟s total installed capacity to over 2.3 million tons per annum (tpa). Ferrochrome production from the
first furnace of the Project Lion II commenced on 6 April 2014 and the second furnace commenced on 30
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171
May 2014. The total investment for the project is R7.5 billion. The investment includes R6.5 billion for the
actual plant and the remainder to increase the capacity of the Magareng Mine to 1.2 Mtpa.
Afarak is conducting feasibility studies on constructing two new 70MW DC furnaces in South Africa, with
total installed production capacity of 280 000 tpa. Construction of these furnaces is expected to be
completed in 2016, and the company is in the process of selecting the preferred site for the project.
Ferrochrome Furnaces announced a new ferrochrome project in South Africa with an estimated capacity of
300 ktpa of low and medium-carbon ferrochrome by the end of 2014. Further investment would allow the
plant to reach a projected 420 ktpa by the end of 2016.
OUTLOOK
According to the Worldsteel Association, world stainless steel production is projected to rise by 9.2 percent
to 41.6 Mt, with China‟s output expected to increase by 13.2 percent during the same period. China‟s
stainless steel production and consumption is expected to remain the driver of future global ferrochrome
demand. Ferrochrome demand is projected to rise to approximately 11 Mt in 2014, while supply is
anticipated to rise by 13.3 percent to 12.2 Mt in 2014 due to planned capacity expansions, particularly from
China and South Africa. China‟s ferrochrome production is forecast to grow by 18 percent to 4.7 Mt in
2014, with South Africa‟s output anticipated to increase by 6 percent to 3.4 Mt in 2014.
Chrome ore prices have declined considerably over the past two years due to an oversupplied market as
well as low ferrochrome prices. Chrome ore and UG2 chrome ore prices are expected to remain
unchanged for the remainder of 2014. Ferrochrome prices are forecast to rise by 3 percent to roughly
US$1.20/lb in 2014. Ferrochrome prices are projected to be in a range of 3.5 percent to 4.5 percent per
annum in the medium term and to reach US$1.31/lb by 2018.
REFERENCES
1. DMR Mineral Economics, 2014
2. ICDA Overview of the Chromium Industry, 2013
3. ICDA Statistical Bulletin, 2014
4. Worldsteel Association
5. International Stainless Steel Forum
6. CRU, Ferrochrome Market Outlook, 2014
7. ICDA, Analysis of the Global Ferrochrome Market, 2014
8. ICDA, Analysis of the Chinese ferrochrome market, 2014
9. Outokumpu, Annual Report, 2013
10. Heinz H. Pariser, ICDA Members Meeting Presentation, Cape Town, March 2014
11. Dr. Gerhard C. Pariser, 2013 PDAC Convention Presentation, Toronto, March 2013
12. United States Geological Survey, Mineral Commodity Summaries, Chromium, February 2014
172
IRON ORE
S. Ntshobane
SUPPLY – DEMAND
Global iron ore reserves were estimated at 81 billion tons in 2013, with Australia accounting for 21.0
percent of the world‟s reserves, followed by and Brazil and Russia at 19.8 percent and 17.3 percent,
respectively. South Africa holds 650 Mt of known iron ore reserves; contributing just 0.8 percent to global
reserves (Table 74).
TABLE 74: WORLD IRON ORE RESERVES, PRODUCTION AND EXPORTS, 2013
COUNTRY RESERVE# PRODUCTION+ EXPORTS+
Mt % Rank Mt % Rank Mt % Rank
Australia 17 000 21.0 1 619 31.5 1 619 46.3 1
Brazil 16 000 19.8 2 330 16.8 2 330 24.6 2
China 7 200 8.9 4 297 15.1 3 0 0.0 11
India 5 200 6.4 5 122 6.2 4 16 1.2 9
Russia 14 000 17.3 3 100 5.1 5 26 1.9 7
Ukraine 2 300 2.8 6 78 4.0 6 38 2.8 4
South Africa 650 0.8 12 72 3.6 7 58 4.3 3
Iran 1 400 1.7 10 59 3.0 10 35 2.6 6
United States 2 100 2.6 9 49 2.5 8 11 0.8 10
Canada 2 300 2.8 6 41 2.1 9 38 2.8 4
Sweden 2 200 2.7 8 26 1.3 11 24 1.8 8
Other 10 650 13.1 172 8.8 143 10.7
TOTAL:2013 81 000 100
1 965 100
1 338 100
2012 80 000 1 850 1 195
Sources: + CRU, 2013
* DMR Directorate Mineral Economics, 2014
# USGS, 2010 (Reserve – Iron content)
World iron ore production increased by 6.2 percent to 1 965 Mt in 2013 compared with 2012, mainly due to
a spike in Australia‟s output (Table 74). Australia was the largest producer at 31.5 percent of total world
production, followed by Brazil and China at 16.8 percent and 15.1 percent, respectively. South Africa‟s iron
ore production increased by 6.6 percent to 72 Mt in 2013 compared with 2012 (Table 75), contributing only
3.6 percent to total world output. Local sales and export mass grew by 10.3 percent and 1.9 percent in
2013, in line with an increment in both the local and global crude steel output.
173
TABLE 75: SOUTH AFRICA‟S PRODUCTION AND SALES OF IRON ORE
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Value Unit Value Mass Value Unit Value
kt kt R' 000 R/t kt R' 000 R/t
2004 39 322 12 430 1 145 600 92 27 745 3 439 885 124
2005 39 542 12 009 1 272 795 106 26 628 6 246 776 235
2006 41 326 11 989 1 395 219 116 27 370 8 532 277 312
2007 42 083 12 407 1 749 498 141 29 724 11 680 793 393
2008 48 983 11 258 1 974 628 175 32 766 20 267 206 619
2009 55 313 8 369 1 888 801 226 44 550 25 242 934 567
2010 58 709 10 561 3 270 326 310 47 493 40 148 279 845
2011 58 057 9 844 4 207 746 427 51 891 58 444 148 1126
2012 67 100 8 393 4 448 978 530 57 110 48 193 830 844
2013 71 534 9 259 5 746 180 621 58 202 57 385 286 986
Source: DMR Directorate Mineral Economics, 2014
Approximately 98 percent of global iron ore output is used in crude steel manufacturing and the remainder
is used in the cement, pigments, chemicals and agriculture industry. World crude steel output grew by 3.5
percent to 1 607.2 Mt in 2013, with China accounting for 48.4 percent of global crude steel output. Global
iron ore exports grew by 12.0 percent to 1 338 Mt in 2013 compared with 2012 owing to stronger demand
driven mainly by China, which increased crude steel output by 7.5 percent. Australia and Brazil accounted
for approximately 70.9 percent of global iron ore exports in 2013. South Africa‟s exports amounted to 58 Mt
in 2013 positioning the country as the third largest iron ore exporter.
China is the world‟s leading importer of iron ore, accounting for 66 percent (821.Mt) of total global iron ore
imports in 2013, followed by Europe and Japan at 10.8 percent and 9.9 percent, respectively. World crude
steel consumption grew by 3.6 percent to 1 481 Mt in 2013. Crude steel demand grew higher than
projected due to stronger than anticipated performance by developed countries. China‟s crude steel
consumption increased by 6.1 percent to 700 Mt in 2013; approximately 47.3 percent of global
consumption (Figure 55).
174
FIGURE 55: REGIONAL CRUDE STEEL CONSUMPTION, 2013
Source: WorldSteel, 2014
PRICES
Iron ore spot prices steadily declined in 2013, after starting the year at US$150/t (China CFR). Spot prices
declined to US$115/t in June 2013 before recovering to US$136/t at the end of 2013, a 4 percent
improvement on the 2012 spot price (Figure 56). Although China‟s steel production and consumption
remained historically high during the year, an oversupplied iron ore market and low steel prices, along with
a surge of iron ore supply, especially from Australia, exerted downward pressure on prices. Despite low
spot prices throughout the year, South Africa‟s export revenue increased by 19.1 percent in 2013
compared with 2012 due to higher export mass as well as improvement in prices in the last two quarters
of the year.
FIGURE 56: IRON ORE SPOT PRICES, 2012 AND 2013
Source: International Monetary Fund, 2014
[CATEGORY NAME]
[PERCENTAGE]
[CATEGORY NAME]
[PERCENTAGE]
[CATEGORY NAME]
[PERCENTAGE]
[CATEGORY NAME]
[PERCENTAGE]
Middle East, Africa & Oceania 6%
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175
EMPLOYMENT
Employment in South Africa‟s iron ore industry fell by 9.4 percent to 21 174 in 2013 as the number of
contract employees declined due to new mines coming into production (Table 76). Permanent employees
increased by 6.1 percent to 9 989 while contract employees declined by 19.9 percent to 11 185 in 2013.
Total remuneration increased by 3.3 percent in 2013 compared with 2012, resulting in a 9.2 percent
increase in the average remuneration per employee.
TABLE 76: SOUTH AFRICA‟S IRON ORE INDUSTRY‟S EMPLOYMENT AND REMUNERATION
YEAR EMPLOYEES TOTAL REMUNERATION AVERAGE REMUNERATION
R' 000 R/employee
2009 13 727 2 178 041 158 668
2010 18 216 3 037 690 166 759
2011 22 342 6 504 656 291 140
2012 23 380 4 690 573 209 587
2013 21 174 4 845 697 228 851
Source: DMR Directorate Mineral Economics, 2014
KEY DEVELOPMENTS
Kumba‟s expansion and exploration project pipeline with capital expenditure of R6.5-billion seeks to grow
production to 70-million tonnes a year in South Africa in 2013. Growth projects under Kumba‟s
consideration include:
The Kolomela mine expansion project, which entails the brownfield development and introduction
of a beneficiation facility to increase production by five-million tons a year from 2017.
The Sishen lower-grade Phase 1 project, aimed at producing additional jig-quality product through
the liberation and/or beneficiation of material from the Sishen jig plant. The project, currently at the
concept study stage, will add 1.7 Mtpa from 2019.
The Sishen lower-grade Phase 2, currently at the exploration stage, is envisaged to produce an
additional 4.3 Mtpa from the lower-grade material.
Project Phoenix, currently at feasibility study phase, is anticipated to produce nearly 3.4 Mtpa for
20 years.
The Zandrivierspoort iron-ore project, currently at prefeasibility study stage, is a proposed 15 Mtpa
run-of-mine operation that is expected to produce 6 Mtpa. The project could potentially come on
stream in 2019.
Assmang concluded an agreement with Transnet Freight Rail (TFR) for an additional allocation of 4 Mtpa
on the Sishen–Saldanha iron ore export channel in 2013; bringing the total allocation to 14 Mtpa. The
increase will accommodate additional volumes as Khumani Mine ramps up production to 14 Mtpa. TFR
176
completed the feasibility study on the expansion of the Sishen–Saldanha iron-ore export channel‟s capacity
to 82 Mtpa. Assmang is expected to apply to secure a deal on future capacity allocation.
The feasibility study at Bushveld Minerals‟ Limpopo project is expected to be completed by the end of
2014. It is projected that production will commence in 2016 using existing infrastructure, and to scale up to
5 Mt of run-of-mine ore following further investment in infrastructure, including railway. The company
signed a memorandum of understanding with China Railway for a joint pyro metallurgical test work
programme in 2013. Subject to a positive outcome, the companies will sign an investment agreement, off
take and joint infrastructure development pacts.
OUTLOOK
According to Global Steel 2014, world steel demand is forecast to grow at about 3.3 percent, with more
demand growth expected to come from outside of China due to that country‟s slow economic growth, which
is expected to negatively affect global iron ore demand. However, CRU forecast global iron ore production
to increase by 3.2 percent in 2014, mainly due to a sharp rise in Australia‟s output, which is projected to
increase by 17.3 percent in the same period. South Africa‟s output is expected to stabilize at 72 Mt in 2014
with exports increasing by 3.0 percent. South Africa‟s infrastructure development programme is expected
to boost iron ore local demand required for local steel output in the medium to long term.
The average iron ore price is expected to decline in 2014 to an average price of US$117/t from an average
price of $136/t in 2013 due to slow demand concerns from China. In addition, aggressive expansion plans
from Australian major producers are expected to depress prices further in 2014 and 2015, due to an
oversupplied market. Price strength is expected in the near-term but, for the remainder of 2014, iron ore
prices are estimated to average at $117/t CFR China, marking a $19/t year on year decline.
REFERENCES
1. Bureau of Resources and Energy Economics, Resources and Energy Quarterly, December 2013
2. Bureau of Resources and Energy Economics, Resources and Energy Quarterly, March 2014
3. Bureau of Resources and Energy Economics, Resources and Energy Quarterly, June 2014
4. Creamer Media‟s Research Channel Africa, A Review of the Iron Ore Sector, 2014
5. Creamer Media‟s Research Channel Africa, Real Economy Insight: Iron-ore, 2014
6. CRU, Iron Ore Market Outlook, April 2014
7. Department of Mineral Resources, Directorate Mineral Economics, 2014
8. International Monetary Fund, www.imf.org, accessed June 2014
9. Iron & Steel Statistics Bureau, World Steel Review, 2013
10. United States Geological Survey, Mineral Commodity Summaries: Iron Ore, February 2014
11. World Steel Association, Steel Statistical Yearbook, 2013
12. World Steel Association, World Crude Steel Production - Summary, 2014
13. World Steel Association, World Steel in Figures 2014
177
MANGANESE ORE
S. Ntshobane
SUPPLY - DEMAND
World manganese ore reserves fell by 9.5 percent to an estimated 570 Mt in 2013. The drop was attributed
to the revision of reserve estimates by the government of Brazil and updated information from major
producers in Gabon. South Africa and Ukraine account for approximately 50.9 percent of known
manganese ore reserves.
TABLE 77: WORLD MANGANESE ORE RESERVES, PRODUCTION AND EXPORTS, 2013
COUNTRY RESERVE# PRODUCTION+ EXPORTS+
Mt % Rank Mt % Rank Mt % Rank
China 44 7.7 6 16 30.2 1 - - -
South Africa 150 26.3 1 11* 21.1 2 8 30.8 1
Australia 97 17.0 3 8 14.8 3 6 23.1 2
Gabon 24 4.2 7 4 7.4 4 4 15.4 3
India 49 8.6 5 3 5.5 5 - 0.3 6
Brazil 54 9.5 4 3 4.7 6 2 7.0 5
Ghana - -
2 3.4 7 2 7.6 4
Ukraine 140 24.6 2 1 2.5 8 - 0.2 8
Malaysia - -
1 2.1 9 - - -
Kazakhstan 5 0.9 8 1 1.9 10 - 0.3 7
Other 7 1.2
4 6.5
4 15.4
TOTAL: 2013 570
53 100
26 100
2012 630
48
22
Sources: + CRU Group, 2014
* DMR Directorate Mineral Economics, 2014
# USGS, 2014
Global manganese ore output grew by 9.0 percent to 53 Mt in 2013 as demand increased on the back of a
recovery from major economies following a contraction in 2012. China was the leading manganese ore
producer contributing 30.2 percent to global output, followed by South Africa at 20.7 percent, (Table 77).
South Africa was the leading exporter contributing 30.8 percent, followed by Australia at 23.1 percent.
South Africa‟s exports sales volumes increased by 1.8 percent to 7.6 Mt mainly due to China‟s rising
demand for manganese ore. The country‟s exports to China increased by 57.7 percent to 5.4 Mt in 2013.
World crude steel output increased by 3.5 percent to 1 607.2 Mt in 2013, driven by rising demand from
China. China‟s crude steel output rose by 7.5 percent to 779 Mt in 2013; approximately 48.4 percent of
world crude steel output. Notwithstanding, sluggish economic growth, China remained the largest importer
of manganese ore. China‟s imports increased by 34.3 percent to 17 Mt in 2013; approximately 64.2 percent
of the total global manganese ore imports.
178
TABLE 78 SOUTH AFRICA‟S MANGANESE ORE PRODUCTION AND SALES, 2003 – 2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Mass Value Mass Value
kt kt R' 000 R/t kt R' 000 R/t
2004 4 282 W 656 W 2 403 1 082 450
2005 4 612 W 682 W 2 119 1 519 717
2006 5 213 W 727 W 2 846 1 519 534
2007 5 996 W 935 W 3 691 2 637 697
2008 6 807 W 1 762 W 4 689 15 582 3 323
2009 4 575 W 584 W 3 975 5 003 1 258
2010 7 172 W 1 321 W 5 986 9 340 1 560
2011 8 652 W 1 325 W 6 773 8 570 1 265
2012 8 943 W 1 135 W 7 498 9 686 1 292
2013 11 056 W 1 569 W 7 631 12 513 1 640
Source: DMR Directorate Mineral Economics, 2014
TABLE 79: SOUTH AFRICA‟S FERROMANGANESE PRODUCTION & SALES, 2003 – 2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Mass Value Mass Value
kt kt R' 000 R/t kt R' 000 R/t
2004 612 153 784 5 127 446 2 496 5 600
2005 571 140 601 4 289 375 1 711 4 565
2006 656 128 451 3 543 556 2 303 4 143
2007 699 151 835 5 546 565 3 703 6 551
2008 503 79 1 115 14 085 500 8 883 17 774
2009 275 23 213 9 310 262 1 820 6 940
2010 473 21 186 9 036 488 4 094 8 397
2011 714 20 169 8 347 556 4 389 7 892
2012 706 33 263 8 084 523 3 961 7 567
2013 681 58 496 8 629 493 4 113 8 334
Source: DMR Directorate Mineral Economics, 2014
World manganese alloys output amounted to 16.7 Mt in 2013, up by 3.1 percent from 2012, on the back of
stronger demand. South Africa‟s high carbon ferromanganese (HCFeMn) and refined ferromanganese
(MCFeMn) production, which constitute the bulk of the country‟s total manganese alloys output amounted
to 681 kt in 2013, a 3.5 percent drop compared with 2012 (Table 79). Local sales mass declined by 75.5
percent to 58 kt while export mass fell by 5.7 percent to 493 kt in 2013.
179
TABLE 80: SOUTH AFRICA‟S PRODUCTION AND SALES OF OTHER MANGANESE ALLOYS, 2003 –
2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Mass Value Mass Value
kt kt R' 000 R/t kt R' 000 R/t
2004 374 39 148 3 798 308 1 833 5 956
2005 275 25 121 4 811 184 1 080 5 865
2006 278 31 130 4 266 149 813 5 468
2007 328 35 216 6 115 223 1 700 7 614
2008 259 47 653 13 958 182 3 021 16 568
2009 118 45 385 8 600 151 1 805 11 955
2010 317 44 413 9 372 271 2 979 10 974
2011 350 34 314 9 276 298 3 020 10 131
2012 177 28 264 9 533 158 2 197 13 910
2013 163 32 319 9 848 131 1 980 15 120
Source: DMR Directorate Mineral Economics, 2014
Production of other manganese alloys declined by 7.9 percent to 163 kt in 2013 compared with 2012,
mainly due to permanent production cuts of silico-manganese in the country, (Table 80). Local sales mass
increased by 14.3 percent to 32 kt while export mass fell by 17.1 percent to 131 kt.
PRICES AND REVENUE
Manganese ore annual average price increased by 10.2 percent to US$5.43/mtu in 2013 compared with
2012, (Fig. 1). Manganese ore prices increased steadily during the first half of 2013 before declining
slightly for the rest of the year. Manganese ore price increased from US$5.45/mtu in the first quarter of
2013 to US$5.70/mtu in the second quarter of the year, and declined for the remainder of the year, ending
the year at US$5.25/mtu. Exports revenues increased by 29 percent in 2013, due to improvement in ore
prices coupled with higher export mass compared with 2012.
180
FIGURE 57: QUARTERLY MANGANESE ORE PRICES, 2008 – 2013
Source: CRU Group, 2014
HCFeMn and MCFeMn prices remained weak in 2013 compared with 2012, averaging at $1 051.67/t and
$1 557.30/t, respectively for the year, down by 13.1 percent and 4.0 percent compared with 2012. SiMn
prices declined throughout the year until a slight improvement in the fourth quarter. The annual average
price of SiMn declined by 15.7 percent to $1 151.90/t in 2013 compared with 2012.
FIGURE 58: MONTHLY AVERAGE PRICES OF MANGANESE ALLOYS, 2008 - 2013
Source: CRU Group, 2014
EMPLOYMENT
Employment in South Africa‟s manganese ore industry increased by 13.2 percent to 9 877 and increased
its share of total mining employment to 1.9 percent in 2013 from 1.7 percent in 2012. Permanent
employees increased by 11.3 percent to 4 114 while contract employees increased by 14.5 percent to 5
763 in 2013. Total remuneration increased by 22.6 percent in 2013 compared with 2012, resulting in a 8.3
percent increase in the average remuneration per employee.
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11
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11
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11
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11
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12
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12
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Q1
13
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13
Q3
13
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2000
3000
4000
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08
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09
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09
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13
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HCFeMn MCFeMn SiMn
181
TABLE 81: SOUTH AFRICA‟S MANGANESE ORE INDUSTRY‟S EMPLOYMENT AND REMUNERATION
YEAR EMPLOYEES TOTAL REMUNERATION AVERAGE REMUNERATION
R'000 R/employee
2009 4 988 731 618 146 676
2010 5 879 946 139 160 935
2011 7 460 1 277 580 171 257
2012 8 726 1 570 665 179 998
2013 9 877 1 925 058 194 903
Source: DMR Directorate Mineral Economics, 2014
KEY DEVELOPMENTS
Transnet announced the relocation of its 5.5 Mtpa manganese terminal in Port Elizabeth to the Port of
Ngqura. Transnet plans to decommission the current capacity at Port Elizabeth in line with the
commissioning of the new terminal in Ngqura by 2017. The Ngqura terminal is to be commissioned with a
capacity of 16 Mtpa. Transnet will spend R33 billion on the expansion and improvement of its bulk and
container terminals over the next seven years.
BHP Billiton-owned Metalloys completed the expansion of Samancor Manganese‟s smelter complex,
estimated at R1 billion. The project involved the construction of a new 81 MVA, energy efficient furnace,
with a capacity to produce 1.2 Mtpa of high-carbon ferromanganese. The new M14 furnace will operate
adjacent to BHP‟s three other furnaces and allow the beneficiation of nearly 30 percent of BHP Billiton‟s
locally mined product. The furnace uses advanced technology that allows off gas emitted to be used for
additional energy generation and thereby improving energy self-sufficiency on the site to 20 percent.
Kudumane Manganese commenced full production in 2013. Kudumane has an estimated 98 Mt of
manganese resources and is envisaged to produce 3 Mtpa of 37.5 percent manganese ore. Kalagadi
Manganese launched the sinter plant at its manganese complex in the Northern Cape. An additional
component of the project is the construction of a 3 Mtpa underground manganese mine and a 3.2 Mtpa
ferromanganese smelter close to the Coega deep-water harbour.
OUTLOOK
According to the CRU, growth in consumption of manganese ore in ferroalloys is expected to rise at a
compound average growth rate (CAGR) of 4.0 percent. Demand is expected to be driven mainly by
medium–carbon ferromanganese, followed by silico-manganese, while high-carbon ferromanganese
demand for ore continues to grow slower on the basis of reduced uptake of the alloy in steelmaking.
China‟s dependence on imports for its supply of manganese units has been rising, increasing by 34
percent in 2013 compared with 2012, due to the depleting resources of domestic ore and rising costs of
extraction. It is expected that demand for imported ore into China will continue to gain strongly, contributing
to anticipated increase in manganese consumption.
182
Manganese ore prices are expected to contract for the remainder of 2014. From 2015 onwards, benchmark
ore prices are expected to rise through to 2018, due to a tightening in the global supply/demand balance
and the levels of output required from China‟s mining industry. South Africa‟s manganese ore production is
expected to reach 14 Mt in 2014 driven by the expected increase in production capacity. Further relief from
logistical constraints is expected to boost production reaching approximately 18 Mt by the end of 2018.
REFERENCES
1. CRU, Manganese Ferroalloy Market Outlook, July2014
2. Department of Mineral Resources, Directorate Mineral Economics, 2014
3. United States Geological Survey, Mineral Commodity Summaries: Manganese, February 2014
4. World Steel Association, Steel Statistical Yearbook, 2013
5. World Steel Association, World Crude Steel Production - Summary, 2014
183
SILICON
Lesego Malebo and Moretlo Nyabanyaba
SUPPLY AND DEMAND
Sources of silicon have not been quantified due to their abundance and are reported to be adequate to
supply world demand for decades. World silicon output was estimated at 7.8 Mt in 2013, a 1.6 percent
increase compared with 2012. Ferrosilicon production represented the largest segment of silicon products
accounting for 73 percent, while silicon metal production accounted for 27 percent in 2013. China
continued to dominate world output, contributing 66 percent to global silicon production, while South Africa
contributed approximately 1.7 percent (Fig. 1). Demand for silicon metal comes primarily from the
aluminium and chemical industries, with more than 75 percent of silicon metal typically consumed by the
chemical industry. Ferrosilicon exports from China reached 227 kt in 2013, a 30 percent drop, as a result of
high export tariffs and anti-dumping duties in Europe. Consequently, Russia took up some of the market
share previously dominated by Chinese exports.
FIGURE 59: CONTRIBUTION TO SILICON PRODUCTION BY COUNTRY, 2013
Source: USGS Mineral Commodity Summaries
TABLE 82: SOUTH AFRICA‟S PRODUCTION AND SALES OF FERROSILICON, 2004 - 2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Mass Value Mass Value
kt kt R'000 R/t kt R'000 R/t
2004 140.6 84.3 436 095 5 174 57.8 268 786 4 648
2005 127.0 73.4 388 446 5 293 41.3 223 216 5 401
2006 148.9 79.5 444 261 5 585 49.0 301 534 6 153
2007 139.6 91.7 616 444 6 724 54.7 395 352 7 222
2008 134.5 71.2 842 183 11 835 44.2 512 037 11 573
2009 110.4 60.9 659 855 10 835 43.6 460 901 10 571
2010 127.7 63.6 710 333 11 169 59.2 631 765 10 672
2011 126.2 57.3 693 448 12 111 67.0 811 277 12 115
2012 83.0 57.2 702 315 12 269 32.7 436 858 13 360
2013 78.4 52.1 724 560 13 941 32.4 503 142 17 128
Source: DMR, Directorate Mineral Economics
China 66% Russia
9%
United State 5%
Other countries 20%
184
South Africa‟s production of ferrosilicon declined by 5.5 percent to 78.4 kt in 2013 (Table 82), in response
to slow economic growth, particularly from China. Local sales mass decreased by 9 percent to 52.1 kt,
while export volume decreased by 0.91 percent to 32.4 kt in 2013 compared with 2012, bringing the total
sales volume to 84.5 kt, a 6.1 percent drop compared with the previous year . Silicon metal production
declined by 35.8 percent to 34.0 kt in 2013 compared with 2012 (Table 83), mainly due to production
disruption at a silicon smelter for a period of six months, while total sales volume declined by 44 percent
due to lower demand.
TABLE 83: SOUTH AFRICA‟S PRODUCTION AND SALES OF SILICON METAL, 2004 - 2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Mass Value Mass Value
kt kt R'000 R/t kt R'000 R/t
2004 50.5 8.8 65 414 7 403 45.9 389 430 8 473
2005 53.5 5.5 47 881 8 716 41.6 450 200 9 556
2006 53.3 7.8 72 270 9 213 47.4 503 583 10 622
2007 50.3 8.9 101 794 11 498 46.3 570 763 12 319
2008 51.8 3.9 87 443 22 438 53.5 1 213 107 22 669
2009 38.6 6.4 91 586 14 310 38.4 640 413 16 677
2010 46.4 10.8 106 016 9 816 62.4 822 406 13 187
2011 58.8 10.6 66 576 6 283 63.1 1 073 668 17 008
2012 53.0 15.1 62 044 4 099 59.4 928 424 15 641
2013 34.0 2.1 26 354 12 604 31.3 809 719 25 882
Source: DMR, Directorate Mineral Economics
PRICES AND REVENUE
Ferrosilicon prices showed some improvement throughout 2013, due to improved demand from both
domestic and overseas markets, following a downward trend in prices in 2012.This resulted in ferrosilicon
annual prices averaging at $1 565/t for 2013, a 3 percent increase from 2012. Silicon metal annual prices
averaged at $2 697/t in 2013, a 3 percent lower when compared with 2012. Despite a 15 percent drop in
ferrosilicon total sales volumes in 2013 compared with 2012, total revenue increased by 7.7 percent due to
improved prices in the same period. Silicon metal total revenues declined by 15 percent due to lower total
sales volumes and prices in 2013 compared with 2012.
185
FIGURE 60: SILICON METAL AND FERROSILICON PRICES, 2009-2013
Source: CRU, Bulk Ferroalloys Monitor
OUTLOOK
The expected behaviour of the silicon market is highly dependent on the performance of the downstream
markets, mainly steel and aluminium alloys sectors, as well as the recovery of the global economy. World
steel demand is forecast to grow at about 3.3 percent while aluminium demand is expected to be stronger
in 2014 than 2013. More demand growth is expected to come from outside of China due to that country‟s
slow economic growth. According to CRU, global silicon metal production is expected to increase by
approximately 5 percent year on year in 2014, due to China‟s capacity expansion. Silicon metal exports are
projected to increase in 2014 into 2015, with demand expected to come from Asian countries, particularly
South Korea, as the country needs more silicon metal to produce polycrystalline silicon, used in
semiconductor and solar power generating applications.
Silicon prices are expected to increase in 2014 and into 2015, due to increased demand. Construction
activities in the United States as well as infrastructure developments in African countries are expected to
promote the uptake of silicon, which in turn will boost silicon prices. In South Africa, the implementation of
the Strategic Integrated Projects (SIPs), which are aimed at fast tracking infrastructure developments, have
the potential to increase local demand for steel as well as increase the demand for solar cells for energy
generation. This could encourage an increase in the utilization of the country‟s silicon production capacity.
REFERENCES
1. www.roskill.com
2. www.ryansnotes.com
3. www.crugroup.com
4. DMR, Mineral economics
5. USGS Mineral Commodity Summaries, 2013
6. www.worldsteel.org
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
Silicon metal Ferrosilicon
186
VANADIUM
Lesego Malebo and Moretlo Nyabanyaba
SUPPLY – DEMAND
World vanadium resources are estimated at 63 million metric tons (Mt) with the majority located in China,
Russia and South Africa. World reserves are still estimated at 14 million Mt in 2013, with China and Russia
accounting for 37 percent each followed by South Africa at 26 percent (Fig.1).
FIGURE 61: WORLD VANADIUM RESERVES, 2013
Source: USGS, Mineral Commodity Summaries
Over 90 percent of vanadium is consumed as ferrovanadium (FeV) in the production of high strength low
alloy (HSLA) steels. Vanadium is also used in the production of titanium alloys for aerospace and industrial
purposes. In 2012, titanium alloys accounted for about 4 percent of vanadium consumption and, about one
percent of vanadium consumed was used in energy storage applications. The most important industrial
vanadium compound, vanadium pentoxide (V2O5), is used as a catalyst for the production of sulphuric acid.
FIGURE 62: WORLD VANADIUM PRODUCTION, 2013
Source: USGS, Mineral Commodity Summaries
World vanadium output increased to 76 kt in 2013, 25 percent higher compared with 2012. China remained
the leading producer at 53 percent, followed by South Africa and Russia at 26 percent and 20 percent,
China 37%
Russia 37%
South Afica 26%
China 53%
Russia 20%
South Africa 26%
Other [PERCENTAGE]
187
respectively (Fig. 2). Vanadium slag from steel making accounted for 59 percent of global vanadium
production, while mine production and secondary material accounts for 26 percent and 15 percent,
respectively in 2013. Global steel production increased by 3.5 percent to 1,607 Mt in 2013 despite tepid
demand growth in most parts of the world.
South Africa‟s vanadium production increased by 6.7 percent to 21.3 kt in 2013, compared with 2012
(Table 84). Total sales mass increased by 1.2 percent to 17.1 kt due to higher domestic demand in
vanadium, as evidenced by a 40.8 percent increase in local sales mass in the same period. In excess of 88
percent of total vanadium production was exported, which dropped by 2.6 percent compared with 2012.
TABLE 84: SOUTH AFRICA‟S PRODUCTION AND SALES OF VANADIUM, 2004 – 2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Value (FOB) Mass Value (FOB)
kt kt R‟mil R/kg kt R‟000 R/kg
2004 23.3 2.6 416 158 16.3 1 675 103
2005 22.6 2.8 1 154 406 15.3 3 758 246
2006 23.8 2.0 452 222 15.6 2 653 170
2007 23.5 2.3 446 191 14.3 2 319 163
2008 20.3 2.3 893 391 12.1 3 090 256
2009 14.4 1.8 267 149 11.9 1 360 116
2010 22.6 1.9 286 152 16.9 2 182 129
2011 21.7 1.7 270 155 17.9 2 288 128
2012 20.0 1.4 211 148 15.5 2 279 147
2013 21.3 2.0 349 147 15.1 2 637 175
Source: DMR, Mineral Economics
PRICES
Vanadium pentoxide (V2O5) prices, which fell to $6.5/lb in December 2012, stabilized at $6.52/lb
throughout the first quarter of 2013. In the second quarter of 2013, V2O5 prices decreased by 3.4 percent to
$6.3/lb and continued trending downward to reach $6.02/lb in the third quarter. V2O5 price showed signs of
recovery in the fourth quarter of 2013 averaging $6.14/lb for the year, although 9.02 percent lower than the
2012 average price. Ferrovanadium (FeV) prices averaged $15/lb for the year, 19.89 percent higher than
the 2012 average price.
188
FIGURE 63: MONTHLY FERROVANADIUM AND VANADIUM PENTOXIDE PRICES, 2010 - 2013
EMPLOYMENT
Average annual employment in South Africa‟s vanadium industry increased slightly by 0.5 percent to 1 496
in 2013. Total remuneration increased by 9.7 percent in 2013 compared with 2012, resulting in a 9.2
percent increase in the average remuneration per employee (Table 85).
TABLE 85: EMPLOYEMENT IN SOUTH AFRICA‟S VANADIUM INDUSTRY, 2009-2013
YEAR EMPLOYEES TOTAL REMUNERATION
AVERAGE
REMUNERATION
R' 000 R/employee
2009 1 313 377 193 287 276
2010 1 382 459 178 332 257
2011 1 436 520 683 362 593
2012 1 489 533 741 358 456
2013 1 496 585 744 391 540
Source: DMR, Mineral Economics
KEY DEVELOPMENTS
The Ironveld pig iron vanadium project, which is expected to create over a thousand jobs is located in the
northern limb of the Bushveld Complex in Limpopo. The company has released its feasibility study
assessing the economic viability of its pig iron and ferro-vanadium project. Ironveld expects to mine its own
magnetite resource at approximately 2.4 Mt per annum. The study demonstrates the viability of developing
the project, delivering 1 million tons per annum (Mt/a) of pig iron and 9.67 kt of FeV production from 2019.
The life of mine is estimated at 25 years with operating cost of R2 393/t pig iron and R47/kg FeV. Also, the
study confirmed the viability of installing an early stage 12 MW smelter to produce an initial 46 kt/a of pig
iron and 445 t/a of FeV from 2015, two years ahead of the commissioning of four 75 MW smelters required
to achieve the longer term 1 Mt production target.
02468
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189
In July 2014, Bushveld Minerals announced the results of its scoping study for the development of its
Bushveld Vanadium Project in South Africa. The study confirms attractive economics for the project with a
modest capital expenditure requirements of US$262 million for a primary vanadium production plant
producing 10 350 tons 99% V2O5 per annum from a 1 Mtpa Run-of-Mine open pit operation.
OUTLOOK
China as the leading producer of vanadium is in the process of significant expansion of co-product
vanadium capacity, with further expansions scheduled over the next five years. In addition, a number of
new projects in the ROW are expected to become operational in the short term, aiming to meet future
increases in vanadium demand. South Africa‟s production capacity is expected to increase in 2016 from
co-product vanadium production as a result of growth in steelmaking from vanadium bearing titaniferous
magnetite ores, driven mainly by the government‟s industrialisation policy objectives. According to Roskill,
increased production from China and other potential new sources is expected to keep the market in
balance to 2017.
However, a marginal market surplus is forecast between 2014 and 2017, equivalent to 5 percent of total
demand. Consumption is then forecast to slightly lag production as new capacity comes on stream
between 2015 and 2017 with prices expected to remain relatively stable. Vanadium pentoxide prices are
expected to reach US$11.00/lb V2O5 by 2017.
REFERENCES
1. DMR, Mineral Economics
2. Global Vanadium Consumption Market report, www.vanadiumsite.com
3. Roskill's Vanadium: Global Industry Markets and Outlook 2013 report, www.roskill.com
4. USGS Mineral Commodity Summaries Vanadium, 2014
5. www.worldsteel.org
190
INDUSTRIAL MINERALS OVERVIEW
N Dlambulo and R Motsie
INTRODUCTION
Industrial minerals are generally accepted to be non-metallic ores. In South Africa the definition includes
raw materials for cement, as well as dimension stone, sand and aggregate. Industrial minerals are
generally high volume, low value commodities compared with other economic minerals. Most deposits
appear near surface and are usually exploited through opencast mining methods rather than underground
mining, presenting an opportunity for small-scale mining development. Because of industrial minerals‟ low
value, some companies mining these minerals have a high degree of vertical integration, in that they mine
raw materials and beneficiate them to the stage of final product.
Industrial minerals play a vital role in many end-user markets with the main ones being the agriculture,
energy, and construction, chemical (medical as well as automobile), metallurgical and pigment sectors,
which account for the bulk of the local purchases. Markets for industrial minerals are often diverse, highly
technical and require unique marketing and sales expertise. Due to their bulky nature associated with a
divergence of low value, consumption of industrial minerals is realised mainly in domestic markets.
SUPPLY AND DEMAND
Total sales of industrial minerals was flat between 2012 and 2013 (Fig.1), resulting from subdued
international and domestic economic activity. Total sales marginally increased by 0.05 percent in 2013 to
R14.07 billion compared with R14.06 billion in 2012. However, from 2009 to 2013, total sales of primary
industrial minerals have grown at a compound annual rate of 7.5 percent as the markets gradually
recovered from the recession. In 2013, industrial minerals contributed 3.7 percent to total revenue
generated from South Africa‟s primary mineral sales, with R12.1 billion coming from local sales and
R1.9 billion from exports (Table 87).
FIGURE 64: INDUSTRIAL MINERAL SALES, 2009 – 2013
Source: DMR, Directorate Mineral Economics
0
5
10
15
2009 2010 2011 2012 2013
Sale
s in
bill
ion
ra
nd
s
Year
Local Sales Export Sales Total Sales
191
The bulk of industrial minerals are consumed in the local construction industry with aggregates, limestone
and dimension stone together accounting for 70 percent of consumption and the balance in the agricultural
industry and other sectors (Fig. 2). As most industrial minerals are low priced commodities and sold in
large volumes, their economic exploitation is highly affected by transport costs and distance to markets.
Local sales value of industrial minerals increased by 9 percent from R11.1 billion in 2012 to R12.1billion in
2013 (Table 86 & 87), as a result of moderate growth in the construction industry on the back of improved
workload activity in the civil sector.
According to Industry Insight, the real value of civil contracts awarded increased by 3.7 percent y-o-y in
2013, following a 12 percent contraction reported during 2012. This is mainly due to an increase in
tendering activity by government, which improved by 3 percent y-o-y during the third quarter.
FIGURE 65: LOCAL SALES VALUE OF INDUSTRIAL MINERALS, 2013
Source: DMR, Directorate Mineral Economics
Export sales values of industrial minerals decreased by 35 percent from R3 billion in 2012 to R1.9 billion in
2013. The biggest contributors to export sales of industrial minerals were fluorspar (27 percent), vermiculite
(20 percent) and andalusite (19 percent) (Fig 3).
Aggregate and sand 44%
Lime stone and lime 23%
Phosphate concentrate
17%
Silica 4%
Dimension stone 3%
Other 9%
192
FIGURE 66: EXPORT SALES OF INDUSTRIAL MINERALS, 2013
Source: DMR, Directorate Mineral Economics
IMPORTS
In 2013, expenditure on imports of primary industrial minerals increased by 5 percent to R1.58 billion
compared with 2012 (Table 88 and Fig 4), as a result of influx of salt products from Botswana and Namibia.
South Africa produces less than 50 percent of its salt requirements, with the shortfall being made up by
imports from Southern African Customs Unions countries. Imports of manufactured industrial commodities
also increased by 12.4 percent to R8.9 billion, resulting from increase in demand for glazed ceramic
products (Table 89).
FIGURE 67: IMPORTS OF PRIMARY AND MANUFACTURED INDUSTRIAL MINERALS, 2009 – 2013
Source: RSA, Commissioner for South African Revenue Service, 2009 – 2013
Fluorspar 27%
Vermiculite 20%
Andalusite 19%
Sulphur 12% Phosphate
concentrate 12%
Dimension Stone 7% Other
3%
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10
2009 2010 2011 2012 2013
Imp
ort
s in
bill
ion
ra
nd
s
Year
Imports Primary Minerals Imports Manufactured
193
EMPLOYMENT
Employment in the industrial minerals sector maintained a compound annual rate of 3.1 percent between
2009 and 2013 (Fig 5). The sector‟s employment increased by 2.1 percent to 20 011 employees, which
accounted for 3.6 percent of the total mining workforce. Average annual earnings generated per employee
in 2013, increased by 7.4 percent to R147 600/employee, while revenue generated per employee
decreased by 2 percent, owing to scheduled maintenances at some operations.
FIGURE 68: EMPLOYMENT IN THE INDUSTRIAL MINERALS SECTOR, 2009 – 2013
Source: DMR, Directorate Mineral Economics
OUTLOOK
Despite being blessed with an abundance of natural resources, South Africa still relies heavily on the
developed nations in the area of finished or manufactured goods. Although imports are essential for
industrial growth, it is a concern that generally in this country a large percentage of mineral exports are
made up of raw materials. Export destinations for most of South Africa‟s industrial minerals are Pacific Rim
countries, such as China, Hong Kong, Japan. These countries are highly industrialised and rely heavily on
the supply of industrial minerals from resource rich nations in Africa.
The industrial minerals sector presents the country with the opportunity to develop a strong and varied
industrial base along with potential creation of a critical mass of small scale miners contributing to the
creation of decent jobs as well as alleviating poverty. This is in line with the Governments‟ various
industrial policies (Mineral Beneficiation Strategy, the NGP, NIPF/ IPAPII), with the National Development
Plan lying at the centre of the all priorities of the South African Government.
In the case of Industrial minerals, export sales values decreased by 35 percent from R3 billion in 2012 to
R1.9 billion in 2013, with significant exports of fluorspar (27 percent), vermiculite (20 percent) and
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
2009 2010 2011 2012 2013
Nu
mb
er o
f e
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es
Year
Growth = 3.1% pa
194
andalusite (19 percent) being the largest contributors. South Africa enjoys ranking of some significance in
these commodities.. In the domestic market, the sales value of industrial minerals increased by 9 percent
from R11.1 billion in 2012 to R12.1billion in 2013. Total sales of primary industrial minerals have grown at a
compound annual rate of 7.5 percent from 2009 to 2013 with the sector contributing 3.7 percent to total
revenue generated from South Africa‟s primary mineral sales, with R12.1 billion coming from local sales
and R1.9 billion from exports pointing out South Africa's important position in the world with respect to
industrial minerals.
The main driver for growth in the industrial minerals sector has always been the agricultural and
construction sectors. A niche market that is fast gaining momentum is in downstream activities in the
fluorochemicals space fuelled by demand from developing nations. Investment in this sector will ensure an
established and globally competitive fluorspar beneficiation industrial cluster in South Africa.
Infrastructure development is one of the key focus areas of South Africa‟s National Development Plan
(NDP), as is considered to be major catalysts for economic growth. The continued investment by
Government on economic and social infrastructure will maintain a healthy demand for most industrial
minerals in the medium term particularly transport sector where strong growth is predicted to driving civil
construction demand.
The future of the South African industrial minerals sector looks positive, especially at the back of local
demand for industrial mineral commodities consumed by sectors like manufacturing, refractories, glass,
cement, construction, chemical and paint as well as the agricultural sector. The Mid Term Strategic
Framework (2009-2014) emphasizes the need for a growth trajectory that will address the country‟s
structural constraints, expand the industrial base by creating competitive industries that provide long-term
decent jobs. Therefore all of these sectors are very critical in supporting these plans of Government.
195
TABLE 86: SOUTH AFRICA‟S PRIMARY INDUSTRIAL MINERAL PRODUCTION AND SALES, 2012
Production Local Sales (FOR) Export Sales (FOB) Total Sales
Commodity Mass (t) Mass (t) Value (R) Mass (t) Value (R) Mass (t) Value (R)
General
Andalusite 163 801 117 186 225 254 147 112 013 305 355 484 229 199 530 609 631
Asbestos * * * * * * *
Barytes * * * * * * *
Calcite * * * * * * *
Feldspar 94 458 92 918 45 898 555 * * 92 918 45 898 555
Fluorspar 170 338 14 484 ** 188 813 ** 203 297 **
Gypsum 558 242 357 574 56 876 011 * * 357 574 56 876 011
Kieselguhr 282 282 639 280 * * 282 639 280
Limestone &
lime 21 637 069 18 478 702 2 517 772 313 13 126 13 190 183 18 491 828 2 530 962 496
Magnesite ** ** ** ** ** ** **
Mica 400 185 964 290 195 1 357 237 381 2 321 527
Perlite ** ** ** ** ** ** **
Pigment
minerals * * * * * * *
Phosphate 2 242 213 2 015 353 ** 689 915 ** 2 705 268 **
Pyrophyllite ** ** 7 511 261 ** 4 584 742 ** 12 096 003
Salt 399 135 479 827 155 293 599 * * 479 827 155 293 599
Silica 2 151 377 2 656 427 543 599 024 18 821 334 899 206 2 675 248 878 498 230
Sulphur 257 019 150 322 123 405 090 125 423 241 351 253 275 745 364 756 343
Talc 4 765 5 568 7 084 046 * * 5 568 7 084 046
Vermiculite 132 886 7 467 15 692 069 96 516 279 696 465 103 983 295 388 534
Clays
Attapulgite 15 850 15 866 7 171 053 * * 15 866 7 171 053
Bentonite 120 566 159 935 119 629 487 21 29 661 159 956 119 659 148
Fire clay 643 285 629 976 14 607 766 * * 629 976 14 607 766
Flint clay 21 065 19 314 28 929 042 527 1 330 174 19 841 30 259 216
Kaolin 20 499 22 273 12 480 240 * * 22 273 12 480 240
Dimension
and building
stone
Granite
187 475 285 865 145 84 014 124 246 393 271 489 410 111 538
Sandstone
2 018 5 859 143 * * 2 018 5 859 143
Siltstone
739 354 546 * * 739 354 546
Slate
23 938 7 992 490 * * 23 938 7 992 490
Aggregate
and sand
53 373 626 4 476 359 468 * * 53 373 626 4 476 359 468
Miscellaneous
2 440 610 250
1 652 071 282
4 092 681 532
TOTALS 11 099 848 315 2 958 112 080 14 057 960 395
Source: DMR, Directorate Mineral Economics
Notes: All quantities are in metric tons, unless otherwise specified
*Nil
**Classified, included under Miscellaneous
196
TABLE 87: SOUTH AFRICA‟S PRIMARY INDUSTRIAL MINERAL PRODUCTION AND SALES, 2013
COMMODITY PRODUCTION LOCAL SALES (FOR) EXPORT SALES (FOB) TOTAL SALES
Mass (t) Mass (t) Value (R) Mass (t) Value (R) Mass (t) Value (R)
General
Andalusite 175 328 82 683 158 932 654 127 577 376 723 345 210 260 535 655 999
Asbestos * * * * * * *
Barytes * * * * * * *
Calcite * * * * * * *
Feldspar 191 443 186 535 101 444 059 * * 186 535 101 444 059
Fluorspar 157776 16336 43171624 158046 525208396 174382 568380020
Gypsum 559 443 327 275 58 287 993 * * 327 275 58 287 993
Kieselguhr 144 143 218 516 * * 143 218 516
Limestone &
lime 21 965 622
20 096
700 2 804 944 148 58 556 20 539 017 20 155 256 2 825 483 165
Magnesite 8219 14718 19142850 * * 14718 19142850
Mica 309 113 835 245 * * 113 835 245
Perlite 1078 2520 2894472 * * 2520 2894472
Pigments
minerals * * * * * * *
Phosphate
rock 2 131 854 1 634 067 2 042 981 668 170 926 222 723 000 1 804 993 2 265 704 668
Pyrophyllite 17336 15276 5750347 419 4943667 15695 10694014
Salt 479 024 479 677 154 464 758 * * 479 677 154 464 758
Silica 2 198 273 2 428 001 458 456 927 10 789 28 383 975 2 438 790 486 840 902
Sulphur 270 173 132 532 67 127 100 140 626 231 605 529 273 158 298 732 629
Talc 4 924 7 117 8 806 136 * * 7 117 8 806 136
Vermiculite 127 658 8 553 17 861 177 118 348 380 489 796 126 901 398 350 973
Dimension
and building
stone
Granite
236 229 329 069 450 75 164 135 476 798 311 393 464 546 248
Sandstone
460 1 031 826 * * 460 1 031 826
Slate
19 266 8 390 497 * * 19 266 8 390 497
Clays
Attapulgite 21 233 15 395 8 417 524 * * 15 395 8 417 524
Bentonite 177 187 169 596 123 077 269 80 139 951 169 676 123 217 220
Plastic clays 1 328 1 328 308 457 * * 1 328 308 457
Flint clay 506 019 514 914 18 732 223 * * 514 914 18 732 223
Kaolin 22 295 35 222 16 740 341 * * 35 222 16 740 341
Aggregate &
sand
61 413 617 5 326 800 476 * * 61 413 617 5 326 800 476
Miscellaneous
2 116 483 694
747 931 396
2 864 415 090
TOTALS 11 786 180 817 1 926 233 474 13 712 414 291
Source: DMR, Directorate Mineral Economics
Notes: All quantities are in metric tons, unless otherwise specified
*Nil
**Classified, included under Miscellaneous
197
TABLE 88: SOUTH AFRICA‟S IMPORTS OF SELECTED PRIMARY INDUSTRIAL MINERAL
COMMODITIES, 2011 – 2013
COMMODITY 2011 2012 2013
Mass (t) Value (R) Mass (t) Value (R) Mass (t) Value (R)
Salt (25.01) 5 363 12 830 375 4 383 290 16 241 265 527 893 193 964 262
Iron pyrites (25.02) 341 940 227 409 260 1 169 195 462 1 276 140
Sulphur (25.03) 714 629 1 073 705 268
506 071
560 843 455 975 489 092 530 362 328
Graphite Natural (25.04) 1 053 18 178 053 768 156 10 371 894 704 8 389 823
Sands (25.05) 5 171 9 607 781 6 614 821 14 594 027 7 329 17 085 535
Quartz (25.06) 408 1 877 186 161 486 500 291 446 3 445 548
Kaolin (25.07) 13 013 30 533 235 17 831 991 46 389 642 14 761 47 482 294
Bentonite (25.08.10) 28 255 45 196 964 42 833 745 59 402 857 37 680 68 794 998
Fire clay (25.08.30) 178 961 624 287 932 1 017 866 955 3 419 825
Other clays (25.08.40) 4 348 13 476 855 6 203 549 25 266 115 6 400 24 515 379
Alumino silicates (25.08.50) 164 323 974 240 142 627 976 359 956 749
Mulite (25.08.60) 50 412 825 112 622 823 500 200 1 717 575
Chamotte (25.08.70) 77 504 361 80 352 562 947 87 278 151
Chalk (25.09) 353 870 211 3 793 686 4 997 543 2 950 5 603 112
Phosphates (25.10) 93 191 116 297 833 265 190 1 321 463 9 778 10 087 752
Barrytes & Witherite (25.11) 3 170 11 921 315 2 961 567 11 468 513 3 128 10 194 800
Kieselguhr (25.12) 5 261 19 572 143 5 216 802 19 969 935 4 016 18 939 815
Natural Abresives (25.13) 2 095 6 392 899 2 250 975 7 152 239 2 088 8 239 185
Slate (25.14) 2 401 6 206 264 1 969 603 8 062 338 3 376 12 187 002
Marble (25.15) 80 469 448 226 225 2 465 778 8 160 9 268 421
Granite (25.16) 4 930 9 405 849 5 976 523 13 549 218 35 165 53 979 936
Pebbels (25.17) 2 138 2 693 491 1 860 203 3 729 155 37 208 20 708 123
Dolomite (25.18) 1 106 2 625 248 1 255 288 3 949 369 7 116 6 449 717
Magnesite & Magnesia (25.19) 106 670 339 631 034 61 922 324 207 573 638 76 472 267 322 588
Gypsum & Plasters (25.20) 9 150 15 742 308 18 363 515 22 789 972 12 375 31 706 268
Limestone (25.21) 1 015 808 609 645 37 838 260 1 527 948 9 185 370
Slaked,quick, hydraulic lime
(25.22) 30 787 004 42 883 920 34 801 330 64 415 926 32 623 70 710 718
Asbestos (25.24) 0 0 0 0 47 8 376
Mica (25.25) 507 1 353 541 424 579 1 353 366 663 2 997 339
Steatite (25.26) 7 126 28 015 008 7 695 739 27 556 285 8 182 33 407 817
Borates Natural (25.28) 1 517 4 889 887 1 156 890 4 360 705 611 3 022 801
Feldspathoids (25.29) 4 332 9 389 122 10 414 783 20 998 959 8 217 19 999 601
Other Minerals (25.30) 47 848 38 633 395 55 704 173 61 649 676 52 473 98 154 185
TOTAL 1 866 151 289 1 509 315 576 1 584 861 533
Source: RSA, Commissioner for South African Revenue Service, 2011 – 2013
Note: Codes in brackets refer to subchapters of the Harmonised System
198
TABLE 89: SOUTH AFRICA‟S IMPORTS OF MANUFACTURED INDUSTRIAL MINERALS
COMMODITIES, 2010 – 2012
Commodity 2011 2012 2013
Value (FOB) Value (FOB) Value (FOB)
R R R
Articles of stone, plaster, cement, asbestos, mica or similar
materials 1160052109 1 396 402 431 1 597 381 694
Building stone (68.02) 272 751 878 338 271 668 321 331 515
Worked slate & articles of slate (68.03) 17 081 007 18 924 065 21 562 582
Millstones and grindstones (68.04) 123 129 954 164 570 865 208 879 780
Natural abrasive powders (68.05) 190 832 414 228 800 898 265 927 592
Slag wool, rock wool & similar mineral wools (68.06) 390 513 421 462 855 480 570 278 282
Articles of asbestos-cement (68.11) 35 215 937 49 830 085 51 090 138
Fabricated asbestos fibres (68.12) 6 856 316 3 260 126 9 818 302
Friction material (68.13) 108 652 598 111 374 572 129 805 188
Worked mica & articles thereof (68.14) 15 018 584 18 514 672 18 688 315
Refractories 1 092 062 112 1095334542 1103337528
Of siliceous fossil meals (69.01) 2 787 686 4 427 437 9 762 955
Other bricks (69.02) 943 968 648 948 032 067 920 252 714
Other refractory ceramic goods (69.03) 145 305 778 142 875 038 173 321 859
Ceramic products 3 429 467 451 3235329552 3661461734
Ceramic building bricks (69.04) 338 705 4 383 427 5 413 245
Roofing tiles (69.05) 8 612 039 11 341 669 14 795 951
Ceramic pipes (69.06) 3 264 033 3 315 428 3 403 989
Unglazed ceramic (69.07) 130 960 409 174 159 631 218 139 646
Glazed ceramic (69.08) 774 677 170 971 850 060 1 274 022 100
Ceramic wares for laboratory (69.09) 1 956 428 462 1 410 269 648 1 353 877 120
Ceramic sinks (69.10) 112 522 005 131 150 472 177 635 887
Tableware (69.11) 193 404 476 233 092 270 269 793 924
Ceramic tableware (69.12) 187 068 177 219 973 468 256 045 532
Ceramic articles (69.13) 49 903 695 59 448 361 72 703 674
Other ceramic articles (69.14) 12 288 280 16 345 118 15 630 666
Glass and glassware (70.00) 2 002 294 168 2 218 794 980 2 569 511 317
TOTAL 7 683 875 840 7 945 861 505 8 931 692 273
Source: RSA, Commissioner for South African Revenue Service, 2011 – 2013
Note: Codes in brackets refer to subchapters of the Harmonised System
199
AGGREGATE AND SAND
R Motsie
SUPPLY AND DEMAND
South Africa‟s sand and aggregate sector is driven by the construction industry, particularly the civil sector.
In 2013, a total of 61.4 Mt of sand and aggregates to the value of R5.3 billion was supplied to the local
market, a year-on-year increase of 15 percent in tonnages with a corresponding 19 percent increase in
value (Table 90). The rise in both the quantity and the value was derived from improved workloads in the
civil construction sector on the back of continued infrastructure development programmes provided by
government. The industry has improved as a result of more roads, dams and power stations being developed
in line with the programme of the Presidential Infrastructure Coordination Committee (PICC).
TABLE 90: SOUTH AFRICA'S SALES OF SAND AND AGGREGATE BY MASS, 2004 – 2013
YEAR +COARSE
xFINE TOTAL
Mass Value (FOR) Mass Value (FOR) Mass Value (FOR)
kt R'000 R/t kt R'000 R/t kt R'000 R/t
2004 39 035 1 948 642 49.9 8 347 136 721 16.4 47 381 2 085 364 44.0
2005 37 923 2 000 985 52.8 12 046 221 034 18.3 49 970 2 222 019 44.5
2006 47 144 2 549 709 54.1 11 419 239 846 21.0 58 563 2 789 555 48.0
2007 50 678 3 077 423 60.7 13 143 298 941 22.7 63 821 3 376 364 52.9
2008 45 218 3 358 639 74.3 13 391 416 364 31.1 58 609 3 775 003 64.4
2009 41 182 3 491 901 84.8 12 422 403 784 32.5 53 604 3 895 685 72.7
2010 39 078 3 419 386 87.5 13 279 457 693 34.5 52 357 3 877 079 74.1
2011 38 203 3 570 160 89.0 13 392 492 323 37.0 51 595 4 062 483 79.0
2012 40 009 3 948 031 98.7 13 365 528 329 40.0 53 374 4 476 359 84.0
2013 46 553 4 710 248 101.2 14 861 616 553 41.5 61 414 5 326 801 86.7
Source: DMR, Directorate Mineral Economics
Notes: +Includes Crusher Sand
xNatural Sand
Aggregates play an integral role in the economy, as they are a necessary building component in
infrastructure development, being the principal material of concrete and asphalt. When infrastructure and
construction stagnate, so does the rest of the economy. Construction aggregates demand is associated with
population growth, which in turn demands new capital expenditure and ongoing need for repair and
replacement of infrastructure. The latest population estimates from Statistics South Africa reveal that the
mid-year 2014 population was at 54 million, a 3.8 percent increase compared with 52 million in 2011.
These figures have a potential upside effect of driving demand for aggregates and sand as additional
infrastructure would be required for development. The South African civil construction industry experienced
a mixed bag of business conditions during the fourth quarter of 2013, according to South African
Federation of Civil Engineering Contractors (Safcec). Industry turnover (nominal) improved by 13 percent,
in the fourth quarter compared with the same quarter in 2012, but contracted by 5 percent for the whole
year.
200
CONSTRUCTION
Overall construction activity in South Africa has been weak over the past few years. However, the
underlying trend started to show some improvement, but at a moderate pace, suggesting conditions are
not deteriorating any further. In 2013, investment by government in construction increased by 8 percent in
real terms to R52.5 billion compared with 2012 and private investment increased by 0.2 percent to
R63.2 billion, while State Owned Enterprises (SOEs) investment contracted by 5.7 percent to R48.5 billion.
The South Africa National Roads Agency Limited (SANRAL) has been a significant contributor to total civil
construction expenditure and a reliable source of work for construction companies. The industry is currently
experiencing pressure with shrinking margins owing to escalating costs of input materials and competition
between companies for securing projects.
According to Industry Insight, the real value of civil contracts awarded increased by 3.7 percent y-o-y in
2013, following a 12 percent contraction reported during 2012. This is mainly due to an increase in
tendering activity by government, which improved by 3 percent y-o-y during the third quarter. Nearly
40 percent of civil tenders issued in the first quarter of 2013 are related to road projects, which boosted
demand for aggregate and sands.
PRICES AND REVENUES
The unit value for aggregates increased by 2.5 percent to reach R101.2/t, the highest unit value recorded
for the past ten years. Sales also improved on the back of favourable prices coupled with an increase in
volumes traded resulting in a 19.2 percent rise in revenue to R4.7 billion. The unit value for sand increased
by 3.8 percent to R41.5/t with a corresponding increase in sales value of 16.7 percent to R617 million.
EMPLOYMENT
The sand and aggregate sector employed 7 579 employees in 2013, an increase of 0.5 percent compared
with 2012 (Table 91). Labour productivity increased by 14.5 percent to 8.1 kt/employee, while revenue
generated per employee increased by 18.5 percent to R702 837/employee. Average annual earnings
increased by 7.6 percent to R124 215/employee indicating improvement in remuneration packages of
workers.
201
TABLE 91: SOUTH AFRICA‟S AGGREGATE AND SAND QUARRIES EMPLOYMENT AND
REMUNERATION, 2009 – 2013
YEAR EMPLOYEES TOTAL REMUNERATION
R'000
2009 6 773 604 730
2010
2011
7 009
7 123
693 767
746 991
2012 7 544 870 694
2013 7 579 941 425
Source: DMR, Directorate Mineral Economics
DEVELOPMNETS
Afrimat has continued to make great strides in the aggregate sector in 2013 with revenue growing by
20.1 percent to R1.3 billion. The acquisition of Infrasors holdings has further expanded Afrimat‟s hold in
industrial minerals as well as its geographical reach within the Gauteng region. The increased spending on
the infrastructure development will enable the group to take advantage of opportunities across Africa
irrespective of the location of fixed quarries.
Raubex Group Limited is currently solidifying its position in the local market with its latest acquisition in
Oranje Mynbou en Vervoer‟s (OMV‟s) aggregate crushing and ready-mix concrete and alpha sand based in
Limpopo. Raumix is the materials division of the Group with its core focus spread over three areas
including contract crushing, production of aggregates for the commercial market and materials handling for
the mining industry. Revenue for the division increased by 8.2 percent to R1.62 billion in the 2013 financial
period
PPC Ltd has made in-roads in the markets with its acquisition of quarries in Botswana, which will ramp up
local supply of aggregates. The acquisition will also make PPC‟s aggregates division the largest aggregate
producer in Botswana .The firm‟s revenue increased by 8 percent in 2013 financial year and aggregate
production increased from 3 Mt to 4 Mt in the same period.
OUTLOOK
The outlook for the construction sector is expected to be positive in the medium term on the back of
government spending on economic infrastructure, particularly transport sector where strong growth is
predicted to driving civil construction demand. However, there remains concern that fiscal austerity and
ratings declines for South Africa and key SOEs may negatively impact state of growth.
Government‟s commitment to spend R847 billion on infrastructure over the next three years could improve
construction industry market conditions. A key factor that could affect the pace of recovery is the rate at
which the roll-out of planned infrastructure expenditure will be effected, as turnover in the construction
202
industry is highly sensitive to government spending. According to Industry Insight, government
infrastructure expenditure on civil works is projected to increase by an estimated 12 percent in real terms in
2014/15. Infrastructure development is one of the key focus areas of South Africa‟s National Development
Plan (NDP), as is considered to be major catalysts for economic growth.
The non-building market for construction aggregates is expected to outpace the building segment in the
medium term, as government continues to invest heavily in public infrastructure, with projects such as the
building of the new water infrastructure for eastern basin in Springs, Gauteng province. Sales of
aggregates for road base and coverings are expected to accelerate through 2017 on the back of advances
in new road constructions and existing road improvement and repair. Crushed stone is projected to gain a
larger share of the aggregates market due to more restrictive land use and environmental regulations as
sand and gravel resources closer to infrastructure developmental nodes get depleted.
REFERENCES
1. Afrimat Ltd integrated report 2014
2. DMR, Directorate Mineral Economics 3. Industry Insight, Construction Industry Forecast Report, 2014 Q2
4. PPC Ltd financial report, 2013
5. Raubex Group Limited audited results for the year ended 28 February 2014
6. Safcec, State of the industry, second quarter 2013
7. South African Reserve Bank, Quarterly Bulletins
8. Statistics South Africa, Employment, unemployment, skills and economic growth presentation
203
ALUMINO-SILICATES
Mphonyana Modiselle
SUPPLY AND DEMAND
The iron and steel industries are the main consumers of andalusite in the form of refractory minerals.
Andalusite is also used in cement and lime, ceramics and foundry industries, glass as well as chemicals at
some of the stages of production line. Global production of the three alumino-silicate minerals, namely:
andalusite, kyanite and sillimanite, increased by 6.4 percent from 409 kt in 2012 to 435 kt in 2013, as a
result of expansions in steel production. Global andalusite supply is mainly dominated by South Africa at
51 percent, followed by the United States (US) at 22 percent and France‟s 15 percent (Fig. 1).
FIGURE 69 – WORLD PRODUCTION OF ALUMINO-SILICATES BY COUNTRY, 2013
Sources: USGS, 2014
The total world refractories demand market was estimated at 24 Mt with crude steel manufacturing
accounting for 70 percent (Fig. 2). The Industrial Minerals publication states that the steel markets were hit
hard in 2012 by an unsettled economic climate, when factors including Eurozone crisis, potential US fiscal
constraints, a possible hard landing for Chinese economy and tough microeconomic conditions around the
world, caused the apparent steel to decline. However in 2013, there was improved stability as the
refractories rebounded on the back of growth of iron and steel markets, which in turn led to a resurgence in
demand for andalusite. According to the World Steel Association, steel production grew by 3.5 percent
year-on-year (y-o-y) in 2013 to 1.61 billion tons.
South Africa, 51%
United States, 22%
France, 15%
India, 11% Other, 1%
204
FIGURE 70 – WORLD REFRACTORIES MARKET BY END-USERS, 2013
Source: Andalusite Resources / Industrial Minerals, 2013
Imerys South Africa operates andalusite mines in the Limpopo Province through its subsidiaries Samrec
Pty (Ltd) and Rhino Minerals. Samrec (Pty) Ltd has the Annesley - Segorong mines on the outskirts of
Burgersfort in the Limpopo Province and Krugerpost, which is located near Lydenburg in the Mpumalanga
Province. Rhino (Pty) Ltd holds the Rhino Andalusite mine near Thabazimbi in the Limpopo Province.
Andalusite Resources is the only alternative producer outside the Samrec group. The company mines
andalusite in the Maroeloesfontein deposit in Thabazimbi in the Limpopo Province and holds a 26 percent
interest Black Economic Empowerment (BEE) consortium with Simang Resources Pty (Ltd).
South Africa‟s production of andalusite increased in 2013 due to improvements in mining operations (Table
92). Samrec reopened the Annesley- Segorong mine at the end of March 2013 and is currently improving
operations on the plant to guarantee a sustainable supply with consistent quality through its investment in
the mine. Local sales decreased in 2013 owing to the closure of two andalusite mines that year. Havercroft
mine closed in February 2013 as the mine became inactive due to lower output and moved to the
Segorong mine with the more economically viable deposit. Krugerspost mine was placed on care and
maintenance from November 2013, ceasing all mining operations on site owing to low plant utilisation.
South Africa‟s exports of andalusite increased in 2013 as the refractory markets showed signs of recovery.
Iron & Steel 70%
Cement & Lime 7%
Ceramics 5%
Non-Ferrous 5%
Glass 4%
Chemicals 4%
Other 5%
205
TABLE 92: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF ANDALUSITE, 2004–
2013
LOCAL SALES
EXPORTS
YEAR
PRODUCTION
Mass
Value (FOR)
Mass
Value (FOB)
Kt
kt
R‟000
R/t
Kt
R‟000
R/t
2004 235 50 64 430 1 284 168 211 719 1 263
2005 228 47 57 568 1 236 135 186 229 1 380
2006 221 47 59 022 1 249 129 183 581 1 421
2007 265 51 70 554 1 382 175 282 164 1 612
2008 217 75 115 292 1 534 148 289 175 1 954
2009 165 53 97 918 1 855 109 253 554 2 326
2010 189 92 167 667 1 829 134 321 933 2 406
2011 * * * * * * *
2012 * * * * * * *
2013 * * * * * * *
Source: DMR, Mineral Economics
Note: *Data withheld for reasons of confidentiality
PRICES AND REVENUES
In 2013, prices were stagnant when compared with the previous year. The South African market prices (2
000 tonne bulk, FOB) for 57-58 percent aluminium trioxide (Al2O3) andalusite concentrate were in the
range of €235-€280/t in 2013 (Fig. 4). The European FOB prices for 55-59 percent Al2O3 were in the range
of €350-425/t. The US prices for raw and calcined 54-60 percent Al2O3 kyanite remained in the range of
$224-$320/t and $373-$439/t, respectively.
206
FIGURE 71 – WORLD ALUMINO-SILICATES PRICES, 2007–2013
Source: Industrial Minerals, 2014
Local sales revenues decreased by just under 30 percent in 2013 owing to mine closures. Export sales
revenues increased by over 20 percent as global demand for andalusite improved.
EMPLOYMENT
Employment in the alumino-silicate industry increased by 1.5 percent from 392 employees in 2012 to 398
employees in 2013 (Table 93) as the Annesley-Segorong mine with the more economically viable deposit
became fully operational. Annesley Mine was officially reopened in March 2013 and is currently employing
100 employees, 54 of whom are permanent, whilst the remainder are contractors.
TABLE 93: SOUTH AFRICA‟S ALUMINO-SILICATE MINES: EMPLOYMENT, 2006–2012
YEAR EMPLOYEES
TOTAL REMUNERATION
R‟000
2006 501 38 776
2007 567 48 581
2008 742 62 956
2009 765 68 471
2010 472 65 953
2011 429 *
2012
2013
392
398
*
*
Source: DMR, Mineral Economics
*Total Remuneration figures withheld for reasons of confidentiality
0
50
100
150
200
250
300
350
400
450
0
50
100
150
200
250
300
350
400
450
Dec '07 Dec '08 Dec '09 Dec '10 Dec '11 Dec '12 Dec '13
Pri
ce $
/s. to
n
Pri
ce €
/t
South African, andalusite FOB European, andalusite FOB
USA ex-works, raw kyanite s.ton USA ex-works, calcined kyanite s.ton
207
RECENT DEVELOPMENTS
Imerys also owns Andalucita SA andalusite mine in the north-west of Peru, which increased production
capacity to 48 kt per annum in 2012 from 25 kt per annum in 2011.
ASX- listed junior company Latin Resources Ltd has been developing a large deposit of andalusite at its
Guadalupito project, which it acquired in 2011 and, is expected to produce 159 kt per annum at an
estimated mine life of 56 years.
In 2001, Imerys South Africa took a decision to expand its mining operations at Annesley mine in the
Segorong area through its subsidiary Rhino Minerals. Since this planned expansion was going to have a
direct impact on the land occupied by the Segorong Community, it became necessary for Rhino Minerals to
consult the concerned community to consider resettlement, compensation and redevelopment of the
community. The resultant extensive 12 year consultative process has seen a total of 246 Segorong families
relocated to Praktiseer and Pidima areas that are environmentally safer for the community. The expected
life of mine is 15 years with a production capacity of 55 kt per annum. Annesley Mine was officially
reopened on the 27th of March 2013.
The resettlement, compensation and redevelopment has seen Rhino Minerals investing over R190 million
for relocation packages that were used for the building of the houses; compensation for grazing and
livestock as well as a cash settlement allowance for each relocating family. The community benefits also
include ownership holding at Imerys South Africa through Community Trusts that were established and are
part of the Broad-Based Black Economic Empowerment (BBBEE) ownership structure.
OUTLOOK
Although considerable andalusite production capacity has been added to the andalusite market in recent
years (through production expansions in South Africa and Peru), the global market has remained stable
since the financial crisis in 2009. The duration of labour unrests in other sectors within mining in South
Africa (iron and steel, foundries, platinum and ferro-alloys), had a severe negative impact on all sectors of
andalusite business. However, Imerys South Africa continued to invest in the andalusite market to
guarantee a sustainable supply with consistent quality through its investment in Segorong mine as well as
engaging in a long term project with local communities. Production rates are set to continue to increase,
with further investment planned in extraction and processing technology.
World refractories production will increase from 41.5 Mt to 46 Mt by 2017, buoying a sector that has been
struggling through economic downturn and thereby increasing demand for alumino-silicates. Growth is also
expected within Chinese cement industry, according to the USGS, an industry which could become a
potential end market for andalusite, kyanite and sillimanite minerals as alternatives to bauxite-based
208
refractory products. The recent discovery of large andalusite resources in Peru and possibility of new
producers entering the supply chain could attract Latin and North America as potential new markets.
Driving the demand for refractories will be steel industry, which accounts for around 70 percent of world
refractories. Consumption of steel will increase owing to improving demand from the automotive and
energy sectors. China‟s quotas on bauxite prices and rising prices could help andalusite permeate the
refractory market worldwide. The Industrial Minerals publication states that andalusite prices are due to
increase as a result of improved demand from refractory industry, partly because companies have started
to substitute bauxite with andalusite as andalusite has some cost advantages due to its less energy
consumption.
REFERENCES
1. Industrial Minerals, 2013-2014.
2. Genine Assis, Samrec Pty Ltd, Personal communication
3. Hester Enslin, Andalusite Resources Pty Ltd, Personal communication
4. Arnold O. Tanner, Kyanite and Related Materials Review, USGS 2013
5. Mineral Economics Directorate, DMR
6. SAIMM 2013 ISSN 2225-6253, “ Merits of using andalusite-based refractories compared to bauxite-based refractories”,
7. Xolisa Mvinjelwa, Segorong Project Update, IMERYS South Africa 2013
209
DIMENSION STONE
O Mkhari and R Motsie
SUPPLY AND DEMAND
Globally, there are sufficient resources of dimension stone. However, supply depends on factors such as
colour, texture and consistency of the material. There has been a significant growth in production of
dimension stone in the world due to more frequent discoveries of new stones and technical advances in
extraction methods.
Local sales volumes increased by 20 percent to 256.1 kt in 2013 (Table 94), due to improved domestic
market conditions in the building sector. Conversely, export sales volumes decreased by
10.7 percent to 75 kt, due to a weaker demand from China and India.
TABLE 94: SOUTH AFRICA‟S LOCAL SALES AND EXPORTS OF DIMENSION STONE 2004 – 2013
LOCAL SALES EXPORTS
YEAR Mass Value (FOR) Mass Value (FOB)
kt R‟000 R/t kt R‟000 R/t
2004 177.9 147 273 828 370.7 342 284 888
2005 302.5 165 783 548 305.0 260 493 854
2006 284.4 185 234 651 211.9 209 754 990
2007 394.8 319 455 809 159.3 156 810 984
2008 458.0 489 346 1 069 85.6 211 674 2 474
2009 334.6 340 493 1 018 61.7 126 508 2 050
2010
2011
336.3
271.4
236 999
241 802
545
1 014
65.4
111.2
120 407
150 212
1 840
1 350
2012 213.4 299 717 1 587 84.0 124 246 1 479
2013 256.1 338 568 1 322 75.0 135 477 1 802
Source: DMR, Directorate Mineral Economics
Notes: In the absence of available data, production is taken to be equal to total sales volume
The major application of dimension stone is within the construction sector, which alone accounts for over
80 percent of demand (interior designers, private home owners and government infrastructure projects),
with the funerary monumental industry accounting for 15 percent and various special applications for
around 3 percent (Fig. 1).
210
FIGURE 72: WORLD CONSUMPTION OF DIMENSTION STONE BY SECTOR
Source: The South African institute of Mining and Metallurgy, 2008
The United States is the world‟s leading market for dimension stone products. Imports of dimension stone
in that country increased in value to about $1.86 billion in 2013 compared with $1.74 billion in 2012. Global
consumption of dimension stone is driven by strong demand from China (24 percent), India (7 percent),
United States of America (6 percent) and Italy (5 percent), where dimension stone blocks are used for tile
production, buildings and in construction activities (Fig.2).
FIGURE 73: WORLD DEMAND OF DIMENSION STONE BY COUNTRY, 2013
Source: Stone Dimension, 2013
Construction sector 80%
Funerary monumental industry
15%
Various special applications industry
3%
other 2%
China 24%
India 7%
United States of America
6% Italy 5%
South korea 4%
Brazil 4%
Germany 3%
other 47%
211
PRICES AND REVENUES
Prices for dimension stone are quite variable and depend on mineral quality and the type of stone. The
average local sales prices for rough blocks decreased by 16.7 percent to R1 322/ton, while the
corresponding sales value increased by 13 percent to R338.6 million on the back of higher sales volumes.
On the other hand, export sales prices increased by 21.8 percent to R1 802/ton, resulting in a 9 percent
increase in revenue to R135.5 million due to the variance in quality of the stone sold in the local and
international markets. Demand for high end stone material is driven by the export market.
EMPLOYMENT
South Africa‟s dimension stone sector employed 1 782 employees in 2013, a decrease of 2 percent
compared with 2012 (Table 95). However, labour productivity increased by 14 percent to
0.19 kt/employee, while revenue generated per employee also increased by 14 percent to
R266 019/employee following moderate activity in the construction sector. Average annual earnings
increased by 3.9 percent to R91 736/employee as a result of conducive market conditions.
TABLE 95: SOUTH AFRICA‟S DIMENSION STONE EMPLOYMENT AND REMUNERATION, 2009 –
2013
YEAR EMPLOYEES TOTAL REMUNERATION
R'000
2009 2 588 156 389
2010
2011
2 081
2 723
140 990
425 537
2012 1 819 160 577
2013 1 782 163 473
Source: DMR, Directorate Mineral Economics, 2013
DEVELOPMENTS
After Anglo American bought a 30 percent stake in German entity, Deutsche Steinindustrie AG, this stake
was later converted to Finestone SA based in South Africa, the largest company in the industry. Finestones
has invested almost US$27 million in its operations in the Rustenburg region to ensure quality in its
extracted volume of dimensional stones. The group has developed new technology which has assisted in
mining a diverse range of shapes and sizes of blocks. This increased production by 7.1 percent to 150 000
m3 per annum.
212
OUTLOOK
South Africa‟s dimension stone production is expected to gain momentum in the near future due to
anticipated activities in construction works, supported by the Infrastructure Investment Programme for
South Africa (IIPSA). Government has appointed the Development Bank of Southern Africa (DBSA) as the
implementing agent of the fund, which is expected to support the implementation of the South African
government‟s infrastructure programme and to address constraints in infrastructure development. This will
be in alignment with the government‟s R847 billion Strategic Infrastructure Projects (SIPs) programme, in
which 18 priority areas have been identified towards advancing the country‟s social and economic
development.
As activity in the building sector continues to recover, demand for dimension stone is also expected to
improve on the back of increased expenditure in public infrastructure projects in the medium-term. The
business confidence level in the local market is improving, which reflects a positive sign of growth in the
commodity market. Similarly, prices for dimension stone are expected to rise as demand for raw material in
the construction sector grows.
REFERENCES:
1. Directorate Mineral Economics, DMR
2. Development bank of Southern Africa,
www.dbsa.org/ Infrastructure investment programme for SA/2014/04/01
3. Industry Insight, Construction Industry Forecast, 2014
4. Industrial Minerals, 2014
5. Mining News, Atlas Copco launches 18-tonne underground loader, www.miningne.ws.08/09/2014
6. Mining Weekly, Metso aiming to Expand African Footprint, Chantelle Kotze, 08th/08/2014
7. Nero Impala, Technology, http://www.neroimpala.com/technology.aspx
8. Stone Dimension Markets, Worldwide demand for natural stone on the rise, www.stonedimesnsionblog.com,27/01/2013
9. The Southern African Institute of Mining and Metallurgy, Dimension stone, Surface mining 2008
213
FLUORSPAR
Mphonyana Modiselle
SUPPLY AND DEMAND
WORLD
Total world production of fluorspar decreased by 4.9 percent from 7.07 Mt in 2012 to 6.72 Mt in 2013, due
to a collapse in the global fluorochemical markets, which led to reduced production as high cost producers
were forced to cut back or suspend production in the face of falling prices. Fluorochemical markets have
suffered from fragility of global economy. Overall world growth was sluggish, demand for white goods and
cars were down and commodity prices depressed. Output was down in Mongolia, China and Africa. China
remained the world‟s leading fluorspar producer accounting for 64 percent of world production followed by
Mexico‟s 18 percent, Mongolia‟s 5 percent, South Africa‟s 3 percent and Spain‟s 2 percent (Fig.1).
FIGURE 74: WORLD FLUORSPAR PRODUCTION, 2013
Source: USGS, 2014
In 2013, the extent of the downturn in the fluorspar end-markets became apparent, particularly in the
fluorochemical sector where demand continued to erode as a result of global economic uncertainty. A
weak fluorochemical sector led to congestion throughout the supply chain causing acid-grade fluorspar
(acidspar) inventories, a significant excess of supply on global markets. Acidspar consumption
subsequently declined causing prices to fall. Both aluminium fluoride and fluorocarbons markets stalled
throughout 2013, leading to a slowdown in hydrogen fluoride production and a subsequent slump in
acidspar demand.
China 64%
Mexico 18%
Mongolia 5%
South Africa 3%
Spain 2%
Other 8%
214
Metallurgical grade fluorspar (metspar) sector has exhibited relative stability over the previous year. This
was driven by the demand from steel industry. The growth in Chinese consumption has also propped up
international fluorspar markets.
SOUTH AFRICA
Vergenoeg mine is jointly owned by Spanish company called Minerales y Productos Derivados SA
(Minersa) with 85 percent share and MEDU Capital (15%) and currently the only active mine in South
Africa. The other fluorspar producers are Witkop and Buffalo, owned by Fluormin (63%) and Sallies (37%).
Witkop mine was placed on care and maintenance since October 2012 – considering the current economic
environment, and falling fluorspar prices below its production costs owing to low fluorspar grade. Buffalo
mine was closed in October 2008, with no plans to recommence operations in the near future. However, in
February 2013, Buffalo mine was sold to Rooiberg Stone, which is currently processing the stockpiles.
South Africa‟s fluorspar production decreased by 8.8 percent to 156 kt in 2013 compared with 170 kt in
2012 (Table 96) owing to the drop in the market demand as well as prices, which led to market excess.
Local sales volumes increased by 21.4 percent from 14 kt in 2012 to 17 kt in 2013, due to the increase in
sales from Vergenoeg mine commissioned briquetting plant, which now accounts for 95 percent of all
possible sales locally. Export sales volumes decreased by 28.0 percent to 136 kt in 2013 compared with
189 kt in 2012. Witkop mine is still on care and maintenance since October 2012, citing weakness in the
fluorspar market.
TABLE 96 - SOUTH AFRICA‟S PRODUCTION AND SALES OF FLUORSPAR, 2004 – 2013
YEAR
PRODUCTION
LOCAL SALES
EXPORTS
Mass
Kt
Value (FOR) Mass Value (FOB)
Kt R‟000 R/t kt R‟000 R/t
2004 265 23 18 247 793 233 183 329 787
2005 266 25 21 576 863 250 215 652 863
2006 256 27 25 798 973 218 244 933 1 125
2007 285 30 31 446 1 048 252 307 511 1 220
2008 299 25 * * 276 * *
2009 198 18 * * 135 * *
2010 157 18 * * 179 * *
2011 196 19 * * 175 * *
2012 170 14 * * 189 * *
2013 155 17 * * 136 * *
Source: DMR, Directorate Mineral Economics
Note: * Sales figures withheld for reasons of confidentiality
215
The World Trade Organization (WTO) ruling against China‟s fluorspar export duty has led the Chinese
government to pursue domestic measures that limit production creating a greater demand for exports. As
China‟s domestic bid to preserve its fluorspar resources and enhance its fluorochemical market continues
following the WTO‟s ruling on export restraints, the country is developing a dependency on other major
producing countries, like Mongolia.
PRICES
The collapse in the demand for fluorochemicals and subsequent excess capacity overwhelmed the
acidspar prices causing an average 25 percent decrease. In 2013, fluorspar prices fell by an average of 45
percent from the highs of 2011. Prices have been trending downward with demand from fluorochemical
markets stalling in the wake of slowing growth rates in the developing economies and weak sales into the
major consuming regions in Europe and Asia. The mature economies demand was weak owing to weaker
consumption levels as suppliers had to compete with low Chinese prices. The value of fluorspar has
diminished throughout the year bringing acidspar prices close to cost levels, and causing a convergence of
metspar and acidspar across the globe.
EMPLOYMENT
Productivity increased by 113.8 percent to 0.62 kt per employee in 2013 compared with 0.29 kt per
employee in 2012. Average earnings increased by 46.1 percent from R174 418 per employee in 2012 to
R254 841 per employee in 2013 (Table 97). Productivity and per capita payments higher increases were a
result of fewer employees, which totalled 252 in 2013 compared with 573 in 2012. The substantial drop in
employment was due to closure of Witkop mine in October 2012.
TABLE 97: SOUTH AFRICA‟S FLUORSPAR QUARRIES: EMPLOYMENT AND REMUNERATION, 2007-
2013
YEAR EMPLOYEES TOTAL REMUNERATION
R‟000
2007 490 51 608
2008 605 62 027
2009 432 59 128
2010 297 49 836
2011
2012
2013
453
579
252
68 467
100 409
64 220
Source: DMR, Directorate Mineral Economics
216
RECENT DEVELOPMENTS
SOUTH AFRICA
On 17th May 2013, Fluormin Plc, British Fluorspar, owner of Witkop fluorspar mine in South Africa, was
sold to Vanoil Energy, a Canadian oil and gas company, after it landed a share offer worth $21.6 billion
(R229.1 billion). It is unclear whether Vanoil intends to do with Fluormin‟s Witkop asset.
Sephaku Fluoride Ltd. (SepFluor) aims to set up a fluorspar beneficiation plant (crushing and screening)
and a flotation mill at SepFluor‟s Nokeng Mine project in Gauteng Province in South Africa. Both plants
were expected to be in operation by the end of 2017. Original plans called for mine production to begin in
the late 2014.
SA Fluorite Pty Ltd - Doornhoek project is expected to be in production by 2017. The company is currently
awaiting finalization of restructuring. The drill programme was approved and it is expected to upgrade the
company‟s resources from “inferred” to “indicated”. Metallurgical testwork at Mintek is underway, and
environmental studies are ongoing.
INTERNATIONAL
Masan Resources Group‟s Nui Phao project in Vietnam operation is set to open late in 2014, with the
expected 200 kt per annum of acidspar output onto a market which remains depressed.
Tertiary Minerals Plc. is currently working on three projects namely the two European projects, Storuman
fluorspar project in Sweden and the Lassedalen fluorspar project in southwest Norway. The Storuman
project is at the advanced stage of exploration, completion of prefeasibility study (PFS), is scheduled for
the end of 2014 and targets 100 kt per annum acidspar. Tertiary has also started developing its
Lassedalen fluorspar project in southwest Norway and is at the early stages of exploration. The third
project is MB fluorspar deposits in Nevada, United States, were acquired in September 2012 and produced
a Joint Ore Reserve Committee (JORC) compliant mineral resource estimate in April 2013.
OUTLOOK
The congestion throughout the supply chain hampered the chances of fluorspar price recovery. However,
an upturn in Chinese activity and improvement in the United States (US) economic growth is likely to
provide a positive platform for market development. The supply side, with a number of new projects coming
on stream is expected to recover. Growth is expected to come from greater stability in Europe and the US,
which will boost fluorochemical demand. In particular, fluoropolymers are forecast to be a big area of end-
market growth this year. Recommencement of operations will be contemplated when the fluorspar industry
enters into more favourable price environment.
217
Demand is expected to remain flat as the global economy improves, the developing nations will drive
growth in the fluorochemical demand. The evolution in the fluorochemical sector is clearly a large area of
prospective growth. Developing nations are going to be key, as growth in their economies will fuel
consumption of refrigerants and air conditioners. Whilst South Africa had successes in the establishment of
its existing fluorochemical industry (Pelchem), the key for the country‟s rise of the fluorochemical
advancement lies in expediting development and growth in the requisite skills.
China‟s trend of decreasing exports will persist compared to some years ago. A reduction in Chinese
exports will leave room for new projects to come on stream. However, in the short term demand will have
to increase to prevent the reduction from having an adverse effect on price. Prices are expected to remain
under pressure if demand fails to improve as expected.
REFERENCES
1. Allan Saad, SA Fluorite, personal communication
2. Garvin Clarke, Sallies Limited, personal communication
3. Industrial Minerals, 2013-2014
4. Kevin Dabinett, Vergenoeg Mining Co (Pty) Ltd, personal communication
5. Lelau Mohuba, Sepfluor Ltd, personal communication
6. Miller MM, Fluorspar Reviews, USGS
7. Mineral Economics Directorate, DMR
8. Rajen Naidoo, Pelchem, personal communication
218
LIMESTONE AND DOLOMITE
R Motsie
SUPPLY AND DEMAND
Limestone is a low-value bulk product and hence not traded widely internationally. Since world resources
of limestone and dolomite suitable for lime manufacturing are adequate, most countries are able to meet
their own input requirements. South Africa's production of limestone and dolomite increased in 2013 by
1.5 percent to 22 Mt compared with 2012. Local sales volume increased by
8.8 percent to 20.1 Mt, following signs of moderate recovery in the construction sector (Table 98).
TABLE 98: SOUTH AFRICA‟S PRODUCTION AND LOCAL SALES OF LIMESTONE AND DOLOMITE
FOR NON-AGGREGATE USE, 2004 – 2013
YEAR PRODUCTION LOCAL SALES
Mass Value (FOR)
Kt kt R‟000 R/t
2004 22 031 17 466 1 227 322 70.3
2005 24 813 18 877 1 306 527 69.2
2006 27 366 20 359 1 517 661 75.0
2007 23 941 20 493 1 698 586 83.0
2008 23 495 19 781 1 899 279 96.0
2009 22 698 20 008 2 105 297 105.0
2010
2011
22 480
21 630
19 226
18 507
2 271 133
2 591 727
118.0
140.0
2012 21 637 18 479 2 517 772 136.0
2013 21 966 20 097 2 804 944 140.0
Source: DMR, Directorate Mineral Economics
Cement manufacturers are by far the largest users of limestone in the country at 68 percent followed by
metallurgical applications (as a fluxing agent in steel making) at 10 percent and agriculture at 5 percent
(Fig 1).
219
FIGURE 75: DEMAND FOR LIMESTONE BY SECTOR, 2013
Source: DMR, Directorate Mineral Economics
Local sales volume of limestone for the manufacture of cement increased by 5.5 percent to 13 Mt in 2013,
even though, activity in the construction industry remained subdued (Table 99). Local sales volume for
metallurgical grade carbonates increased by 8.6 percent to 1.9 Mt prompted by demand from the steel
industry. However, local sales volumes of agricultural limestone and dolomite (aglime) decreased by 9.4
percent to 981 kt as a result of a decline in demand from fertiliser applications.
TABLE 99: SOUTH AFRICA‟S LOCAL SALES OF LIMESTONE AND DOLOMITE BY APPLICATION,
2004 – 2013
YEAR CEMENT METALLURGICAL AGRICULTURAL OTHER
Mass Value (FOR) Mass Value (FOR) Mass Value (FOR) Mass Value (FOR)
kt R‟000 R/t kt R‟000 R/t kt R‟000 R/t kt R‟000 R/t
2004 11 565 225 433 19 2 041 107 887 53 948 48 404 51 1 139 275 612 242
2005 13 519 279 474 21 1 964 114 205 58 604 35 948 60 1 328 297 219 224
2006 14 225 313 038 22 2 183 131 284 60 707 51 779 73 1 533 335 919 219
2007 14 647 350 922 24 1 569 117 847 75 860 59 304 69 1 774 366 980 207
2008 14 252 403 215 28 1 372 120 083 87 879 72 263 82 1 646 381 021 231
2009 14 860 462 122 31 1 237 117 632 95 855 81 762 96 1 616 404 149 250
2010
2011
13 458
12 373
443 978
456 522
33
37
1 910
1 745
190 589
194 458
100
111
783
916
86 553
104 267
109
114
1 780
1 946
447 341
471 378
251
242
2011
12 373
456 522
37
1 745
194 042
111
901
101 081
112
1 948
472 135
242
2012
12 358
463 196
37
1 703
208 933
123
1 083
140 557
130
2 125
525 422
247
2013 13 037 498 276 38 1 850 242 566 131 981 140 414 143 3 198 764 737 239
Source: DMR, Directorate Mineral Economics
CEMENT IMPORTS
South Africa‟s imports of cement soared to 1 177 kt in 2013, a 35.6 percent rise compared with 868 kt in
2012 (Fig 2). The increase comes amid allegations of dumping of cement products from Pakistan into the
Cement 68%
Metalurgical 10%
Agricultural 5%
Other 17%
Total = 19.1 Mt
220
local market as a result of oversupply in that country. About 93.9 percent of all types of imported cement
were from Pakistan in 2013, with a notable increase in other types of cement at 1 104 kt. The South African
International Trade Administration Commission (ITAC) is conducting an investigation on the uncompetitive
behaviour by Pakistan for selling cement products of a similar quality and standard in South Africa at a
price 48 percent lower than the normal value in Pakistan. This practise has led to local producers feeling
the squeeze in their sales volumes, profit, output and the market share.
FIGURE 76: SOUTH AFRICA'S IMPORTS OF CEMENT PRODUCTS, 2011 – 2013
Source: South African Revenue Service, 2013
LIME
A commercially important property of lime is its ability to form solutions with silicates. It is used in steel and
ferro-alloys manufacturing, chemical industries and in environmental applications such as water
purification. Local sales volume of lime (Table 100), slightly decreased by 1.8 percent to 1.19 Mt in 2013,
compared with the previous year owing to low volumes of steel production. Sales volume of quicklime for
pyrometallurgical and chemical applications dropped by 2 percent to 1.09 Mt, while sales value increased
by 1.3 percent to R1.07 billion. The increase in sales value resulted from favourable prices in chemical
applications, which improved by 5.9 percent to average R1 040/t in 2013. Hydrated lime sales volumes for
water purification decreased by 0.4 percent to 50.7 kt whilst the sales volumes for chemical use decreased
by 14 percent to 12 kt as demand for other substitute products improved.
0.0
200.0
400.0
600.0
800.0
1000.0
1200.0
2011 2012 2013
Mas
s (k
t)
Clinker White cement Other Aluminous cement Other hydraulic cement
221
TABLE 100: SOUTH AFRICA‟S LOCAL SALES OF LIME, 2012 – 2013
LIME PRODUCT, 2012 2013
BY SECTOR USE Mass Value (FOR) Mass Value (FOR)
Kt R‟000 R/t Kt R‟000 R/t
Quicklime
Pyrometallurgical 564 520 823 923 559 520 484 931
Chemical 549 539 307 982 532 553 033 1 040
SUB-TOTAL 1 113 1 060 130 953 1 091 1 073 517 984
Hydrated lime
Water purification 50.9 61 701 1 213 50.7 62 728 1 238
Chemical 14 14 540 1 062 12 12 520 1 086
Other 32 43 294 1 373 37 40 555 1 097
SUB-TOTAL 97 119 535 1 216 100 115 803 1 158
TOTAL 1 210 1 179 665 975 1 188 1 188 734 1 001
Source: DMR, Directorate Mineral Economics
PRICES AND REVENUES
In 2013, there was a general increase in prices of limestone for different applications. Local unit values for
limestone increased by 29 percent to R140/t, resulting in a 11.4 percent increase in revenue to
R2.8 billion. The moderate recovery in the construction industry has seen demand for limestone used for
cement manufacturing rising to 13 kt from 12.4 kt, a 4.8 percent increase with a corresponding 2.7 percent
increase in the unit value. Furthermore, prices of limestone used in metallurgical and agricultural
applications trended upwards, averaging R131/t and R143/t respectively. The unit value for metallurgical
applications increased by 6.5 percent despite weaker demand from the steel industry, while the unit value
for agricultural applications increased by 10 percent owing to increased demand for fertilisers.
EMPLOYMENT
Employment in the limestone and dolomite sector increased by 6.3 percent to 2 987 employees compared
with 2012 (Table 101). Labour productivity decreased by 4.2 percent to 7.4 kt/employee, while revenue
generated per employee increased by 5.1 percent to R941 256/employee. Average annual earnings
increased by 0.9 percent to R157 264/employee due to faster increase in earnings than employment.
222
TABLE 101: SOUTH AFRICA‟S LIMESTONE AND DOLOMITE QUARRIES: EMPLOYMENT AND
REMUNERATION, 2004 – 2013
YEAR EMPLOYEES TOTAL REMUNERATION
R‟000
2004 4 085 242 043
2005 5 210 312 073
2006 2 385 251 895
2007 2 452 286 461
2008 2 517 321 698
2009 2 490 359 959
2010 2 635 410 250
2011 2 723 425 537
2012 2 811 438 208
2013 2 980 468 648
Source: DMR, Directorate Mineral Economics
RECENT DEVELOPMENTS IN THE CEMENT INDUSTRY
The Built Environment unit at the Council for Scientific and Industrial Research (CSIR) has developed a
cost-competitive ultrathin concrete pavement surface, which is more durable than many other pavement
alternatives. The ultrathin concrete will be used for upgrading unpaved roads with minimal amount of steel
reinforcement, a move likely to lead to stronger demand for cement and ultimately limestone.
Sephaku Cement‟s construction of an integrated clinker and cement production plant (Aganang) in
Lichtenburg and a milling plant in Delmas has been completed. The Aganang plant is expected to produce
1.9 Mt of clinker and 1.2 Mt of cement per annum. The Delmas plant will have an annual cement
production capacity of 1.4 Mt. Sephaku Cement is expected to reach steady production at both plants in 2015
with ramp up of production volumes to be in line with market demand. These developments will drive South
Africa's cement production to 14 Mt per year. Aganang will employ about 170 people at the cement factory
and create an additional 300 employment opportunities through subcontractors.
Mamba Cement, a joint venture between Jidong Development Group, the China-Africa Development Fund
and investment group Women Investment Portfolio Holdings (WIPHOLD) plans to build a R1.8 billion
cement plant with a capacity of more than 1 Mt/annum in Limpopo province at an established
limestone deposit. Jidong Development Group and China-Africa Development Fund will hold 51 percent of
the shareholding, while WIPHOLD and an unidentified shareholder will account for the remaining balance
of 23.9 percent and 25.1 percent respectively.
AfriSam‟s ready-mix cement plant in the Saldanha Bay industrial development zone (IDZ) became fully
operational in June 2014. The facility would have a production capacity of 70 m³/hr and comprise storage
223
silos for cement and aggregates. The plant will provide ready-mix cement to the upcoming developments in
the IDZ and the Saldanha Municipal area, which will create 10 000 jobs for locals during the initial
development phase and 40 000 when the IDZ is fully operational.
Pretoria Portland Cement (PPC) has acquired the remaining 50 percent stake from Pronto Holdings, a
Gauteng based ready-mix concrete and fly ash-supplier, for a total of $41.9 million. Within the continent,
PPC is expected to commission a 600 kt/a plant in Rwanda later in 2014 as part of its strategy to generate
40 percent of its revenues from the rest of the continent by 2017. Feasibility studies for a 2 Mt per annum
plant in Algeria are in advanced stages and the company hopes to add Algeria to its $1-billion African
project portfolio. The main limitation currently on construction activity is the depressed private mining
investment, which has led to subdued construction expenditure and has seen companies exploring
opportunities outside of South Africa. However, government stimulus through infrastructure development
programmes might offset the current market conditions.
OUTLOOK
The positive contribution to construction investment by government over the past three years cushioned
the contraction of investment by SOE‟s and the private sector. During the same period, government spent
R642 billion on infrastructure projects in a bid to unlock constraints in major strategic projects hindering
economic growth. A further R847 billion is expected to be spent over the medium-term expenditure
framework (MTEF) period, which will result in a stimulation of the local economy and a rise in demand for
limestone and other construction minerals. The South African National Roads Agency Limited (Sanral),
which is responsible for national road maintenance and upgrading, has been allocated R32.9 billion for
national road improvements and R2 billion for the rehabilitation of coal haulage roads in Mpumalanga over
the MTEF period. In addition, spending on road projects by provincial governments is expected to total
R27.6 billion during the same period.
Civil construction activity is expected to pick up in future as 78 percent of the national road network is older
than the original 20 year design life and will need rehabilitation, thus creating opportunities for construction
companies. Furthermore, growth in approved residential plans by large municipalities signals a recovery in
the sector. The entrants of new cement producers in the market and planned future operations will ensure
sufficient supply for these developments. Cement prices are expected to be under some downward
pressure in the long term due to increased competition as new plants come online.
The continued investment in road networks and social infrastructure will maintain a healthy demand for
limestone and related minerals in the medium term. Similarly, the rise in demand for limestone will be
driven by the agricultural sector on the back of growing population and flue-gas desulphurisation
application at Eskom's power stations with Medupi and Kusile yet to be commissioned. Prices for limestone
are therefore expected to continue increasing in correlation with rising demand from different applications.
224
REFERENCES
1. DMR, Directorate Mineral Economics
2. Industry Insight. Construction Industry Forecast Report, 2014 Q2
3. National Treasury, Budget Speech, 2013
4. PBD Lime. Uses of Lime. www.incamining.co.za accessed on 30/07/14
5. Research Channel Africa.Construction, A review of South Africa‟s construction sector, February 2014
6. South African Revenue Services (SARS)
225
PHOSPHATE ROCK
Munyadziwa Muravha
SUPPLY DEMAND
World production of phosphate rock increased by 3.2 percent to 224 Mt in 2013 compared with 217 Mt in
2012 owing to increased production of phosphoric acid. China is the world‟s largest phosphate producing
country, accounting for 43 percent of production followed by the United States at 14 percent and Morocco
& Western Sahara at 13 percent. Russia‟s contribution decreased slightly to 6 percent compared to the
previous year (Fig 1).
FIGURE 77: PHOSPHATE ROCK PRODUCTION BY COUNTRY, 2013
Source: USGS, 2013
Global capacity of phosphoric acid (H3PO4), measured as P2O5 content, by the end of 2013 amounted to
58.0 Mt/a while phosphate fertilizers capacity is estimated to have amounted to 49.6 Mt/a.
South Africa‟s production of phosphate rock increased by 16.4 percent to 2 131 kt in 2013 compared with 1
831 kt in 2012 due to increased demand. The type of phosphate rock mined at Foskor, the country‟s
largest producer is highly sought after. Local sales mass increased by 15.4 percent to 1 634 kt compared
with 1 415 kt in 2012 (Table 102). This increase was supported by improved transport logistics by
producers. Local export volumes decreased by 72.5 percent from 620 kt in 2012 to 170 kt in 2013.
United States 14%
China 43% Morroco and Western Sahara 13%
Russia 6%
Jordan 3%
Brazil 3%
Other Countries 18%
226
TABLE 102: SOUTH AFRICA'S PRODUCTION AND SALES OF PHOSPHATE ROCK, 2001– 2013
YEAR PRODUCTION LOCAL SALES EXPORTS
Mass Mass Mass
Kt kt kt
2001 2 420 2 591 555
2002 2 803 2 532 349
2003 2 643 250
2004 2 735 2 484 268
2005 2 577 2 498 91
2006 2 629 2 252 0
2007
2008
2 556
2 287
2 523
2 687
36
0
2009 2 237 2 268 0
2010
2011
2012
2013
2 148
2 575
1 831
2 131
1 880
2 155
1 415
1 634
25
194
620
170
Source: DMR, Directorate Mineral Economics
World resources of phosphate rock are more than 300 000 Mt while world reserves are estimated at 67 Bt.
Morocco holds the world largest reserves of Phosphate rock at 50 Bt, followed by China‟s 3.7 Bt and
Algeria at 2.2 Bt. South Africa is ranked at 5th position with 1.5 Billion tons.
Foskor has mined an average of 2.4 Mt of phosphate rock per annum since 2004, of which 70 percent is
used for the production of phosphoric acid, 15 to 20 percent is exported to Japan, New Zealand and the
Netherlands, while the rest is sold locally. Omnia Fertiliser is the key local customer. Palabora Mining
Company (PMC) provides 20 to 25 percent of crushing and milling capacity of Foskor phosphate rock
production. The déclinant performance at. PMC has had a negative effet on Foskor‟s production and future
planning. However, the two companies continue to engage in an effort to improve performance. Foskor is
also planning to expand the fertiliser product range to include soluble MAP (Mono ammonium Phosphate),
NPKs (fertiliser products containing nitrogen, phosphate and potassium), and bagged products for
distribution to lucrative markets in New Zealand, Central Africa and Israel.
Fertilizers account for 87 percent of global phosphate demand, food and industrial uses comprise a further
6 percent while feed accounts for 7 percent. Of the phosphate rock produced globally, DAP accounts for 39
percent of demand, MAP 31 percent, SSP 15 percent, TSP 7 percent and 8 percent for other uses (Fig.2).
227
FIGURE 78: WORLD PHOSPHATE ROCK DEMAND, 2013
Source: CRU
More than 95 percent of phosphate rock mined from the United States was used to manufacture
phosphoric acid and super-phosphoric acid, which were used as intermediate feedstock in the manufacture
of granular and liquid ammonium phosphate fertilizers and animal feed supplements. Approximately 45
percent of the wet phosphate fertilizers (DAP and MAP) are merchant grade phosphoric acid. The balance
of the phosphate rock was used for the manufacture of elemental phosphorus, used to produce
phosphorus compounds for a variety of food-additive and industrial applications. In China, rising production
costs experienced by producers, could affect production gradually. MAP and DAP are the most important
phosphate fertilisers, and are manufactured by the neutralisation of phosphoric acid with ammonia. MAP
contains 11 percent nitrogen and 22 percent phosphorus, whereas DAP contains 18 percent nitrogen and
20 percent phosphorus.
In South Africa, the Acid Division at Foskor has three production plants, for sulphuric acid, phosphoric acid
and granular fertilizer. Sulphuric acid is combined with the rock concentrate from the Mining Division to
produce phosphoric acid. The phosphoric acid is either exported in its acid form and sold and locally, or
used in the production of granular fertilizer, which is mainly sold locally.
Global phosphate rock production amounted to 224 Mt in 2013. About 15 percent of the total 224 Mt was
traded, despite the low volumes involved. Morocco and Jordan were the leading exporters in 2013.
However, socio political risks in these two countries are raising fear of potential upheaval, which might
affect phosphate rock availability. Amongst the largest exporters, Egypt and Peru have raised their output
volumes while civil strife has impacted on Syria‟s supply. The largest concentration of phosphate rock
exporters are in the Middle East and North Africa, which together account for 80 percent of world trade of
39%
31%
15%
8% 7%
DAP
MAP
SSP
Other
TSP
228
phosphate and are the suppliers of the best quality phosphate rock. India is the second largest global
consumer of phosphates after China. With very limited indigenous rock supplies, India imports phosphate
rock and phosphoric acids to produce DAP domestically. South Africa‟s Foskor, is one of the largest
suppliers of phosphoric acid to India. The company also supplies other countries including Europe, the
Middle East, North and South America and sub-Saharan Africa.
PRICES
Phosphate rock price decreased by 43.3 percent to $51/t in 2013 compared with $90/t in 2012 as a result
of weak global market conditions while phosphoric acid price decreased by 14.1 percent to $825/t in 2013
compared with $960/t in 2012. Diammonium phosphate (DAP) price declined by 9.1 percent to $500/t and
trisodium phosphate (TSP) price increased by 97.3 percent to $365/t in 2013 (Fig.3). Phosphate rock
prices are now steadying after falling throughout 2013. Fertiliser products also experienced a large decline
while the decline for feeds and industrial products were down moderately. Phosphate producers reported
pressure on profit margins despite large sales as a result of weak prices.
FIGURE 79: PRICES OF PHOSPHATE RESOURCES, 2006 –2013
Source: Fertilizer International, 2013
EMPLOYMENT
Locally, employment increased by 14.1 percent to 3 684 employees due to increased number of
contractors approved for projects. Remuneration increased by 16.1 percent from R756.9 million
to R878.6 million. Each employee generated R240.5 thousand in 2013, an increase of 1.7
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2007 2008 2009 2010 2011 2012 2013
$/to
nn
e
Year Phosphoric acid Phosphate rock DAP bulk TSP bulk
229
percent when compare with R236.4 thousand. Productivity increased by 2.0 percent to 583.2 t
per employee per year due to aforementioned increase in employment and production.
OUTLOOK
According to the International Fertilizer Industry Association (IFA), world fertiliser demand rebounded firmly
in 2013 going into 2014. Investments in new capacity by the fertiliser industry will have positive effects in
the form of new supply to secure growing fertilizer demand and employment in the manufacturing and
mining sector. Future expansions will be driven by increasing demand from fertiliser and feed markets
despite the fact that phosphate rock is used to produce a wide range of products including food and
industrial grade phosphates. India is expected to continue playing a major role in phosphate demand,
encouraging the development of further export capacity in the Arab Gulf and China.
According to International Fertilizer Industry Association Fertilizer Outlook 2014-2018, global phosphate
rock supply is expected to grow by 18 percent from 2014 to 258 Mt in 2018. Leading phosphate producers
are expected to account for 62 percent of this increment. Global Phosphoric acid demand is forecast to
grow at an annual rate of 2 percent over 2013 to reach 48 Mt in 2018. Supply/demand conditions show a
stable potential balance in the short term, followed by a moderate increase starting in 2016 and reaching
4.3 Mt by 2018, representing 8 percent of potential supply. Global granulation capacity is estimated to rise
by 7 Mt of phosphoric acid input between 2012 and 2017.
Phosphate rock and phosphoric acid prices have been decreasing since 2011 due to weak global market
conditions. In 2014 prices continued to decline further but are expected to firm up by the end of 2014,
which will urge buyers back into the market, notably in India and Pakistan. Prices are expected to increase
slightly in 2015 at the back the anticipated improved demand.
South African production is expected to increase slightly on the back of improved production processes for
phosphate at the country‟s leading phosphate producing mine (Foskor). The effect of population growth,
food shortages and climate change patterns continue to drive the demand for phosphates. Phosphate rock
is emerging as an essential tool to address food shortages as ways are sought to best use phosphate
fertilisers to tackle food shortages.
Continuing plans and programmes towards securing food for South Africa will begin to take shape in the
short term in line with government commitment to the National Development Plan aim of securing food for
all South Africans. Collective efforts including studies to unpack the strong linkages between the mining
industry and the agricultural industry will make a significant contribution towards food security. As new
systems are introduced, jobs are created to accomplish the ultimate goal of alleviating poverty and
unemployment.
230
REFERENCES
1. Fertilizer International magazine, May –August 2012/2013
2. Foskor Integrated Annual Report 2012
3. Patrick Heffer and Michael Prud‟homme, Fertilizer Outlook 2014-2018. International Fertilizer Industry Association
4. United States Geological Survey, Mineral Commodity Summaries, Phosphate Rock, January 2014.
5. http://www.integer-research.com/2012/fertilizers-chemicals
231
SPECIAL CLAYS
Munyadziwa Muravha
SUPPLY AND DEMAND
Clays are a complex group of naturally occurring fine grained minerals, that shows plasticity through a
variable range of water content, and which can be hardened when dried. The term special clays refers to
attapulgite, bentonite and kaolin.
Kaolin is a soft, white, plastic clay, comprising several minerals, the most important being kaolinite. Fine
kaolin is used in the paper industry while coarse kaolin is used in the filler industry.
Bentonite is largely composed of montmorillonite, which is mainly a hydrous aluminium silicate. In drilling,
bentonite is usually mixed with a major quantity of water to form a drilling mud, which is then pumped into a
bore hole during the drilling process. Other than the oilfield end-market, the mineral is also used in a
variety of applications such as sandcasting, iron ore pelletisation, insecticides, pet-litter, pharmaceuticals
and cosmetics.
Attapulgite is a magnesium aluminium phyllosilicate which occurs in white and greyish colours. Its main
applications are in drilling mud, coatings, pet litter, animal feed, floor absorbent, horticulture,
pharmaceuticals bleaching clays, fertilizer, oil pollution control, carriers and anti-slip agents.
Total world kaolin production increased by 2.2 percent from 36.2.0 Mt in 2012 to 37.0 Mt in 2013. Demand
from the paper end market was stable and remained unchanged in 2013. The United States (US)
accounted for 16.1 percent of the total world production of kaolin followed by Uzbekistan at 18.9 percent
and Germany at 12.2 percent.
Global bentonite production increased by 3.5 percent from 9.9 Mt in 2012 to 10.3 Mt in 2013 as a result of
a stronger demand from the construction and pet litter industries. The US accounted for 48.1 percent of
total world bentonite production, followed by Greece at 11.7 percent and Brazil at 5.5 percent. Production
increased slightly in most of the bentonite producing countries.
World attapulgite production marginally increased from 2.9 Mt in 2012 to 3.0 Mt in 2013. The US is the
major primary producer accounting for 68.0 percent of total world attapulgite production, followed by
Spain‟s 19.0 percent and Mexico‟s 9.0 percent.
Global reserves are large and distributed throughout many countries, but country-specific data is not
available.
232
FIGURE 80: WORLD PRODUCTION OF SPECIAL CLAYS, 2013
Source: USGS, 2013
In South Africa the biggest attapulgite producer is Arcelo Mining (owned by Meyers Minerals) in Limpopo
Province. Other attapulgite producers are Atta Clay in Lydenburg (Mpumalanga Province), Matutu
Absorbents and Dwaalboom Attapulgite (owned by G & W Base) in the Rustenburg area, Northwest
Province. G & W Base is the largest bentonite producer followed by Cape Bentonite in the Western Cape
and Atta clay. G & W Base is also the largest producer of kaolin.
South Africa‟s production of kaolin increased by 8.8 percent from 20.4 kt in 2012 to 22.3 kt in 2013 due to
increased demand from paper end-market (Table 103). Local sales mass increased by 58.1 percent to
35.2 kt while local sales value increased by 34.1 percent to R16.7 million in 2013 compared with the
previous year owing to higher unit values. Kaolin imports increased by 8.4 percent to 19.3 kt as a result of
increased demand from the ceramics end-market.
0
5000
10000
15000
20000
25000
30000
35000
40000
2009 2010 2011 2012 2013
Pro
du
ctio
n ( M
t)
Kaolin Bentonite Attapalgite
233
TABLE 103: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND IMPORTS OF KAOLIN, 2002-2013
YEAR
PRODUCTION
LOCAL SALES
IMPORTS#
Mass
Kt
Value (FOR) Mass Value (FOB)
Kt R‟000 R/t Kt R‟000 R/t
2002 86.7 79.4 37 332 470 17.8 53 254 2 988
2003 86.4 72.9 40 573 556 11.6 24 925 2 156
2004 81.9 67.8 42 880 633 15.9 23 562 1 478
2005 59.4 52.7 30 321 575 9.8 16 641 1 690
2006 51.6 39.1 15 809 404 17.6 31 219 1 774
2007 50.8 39.3 10 232 260 15.8 27 927 1 768
2008 39.2 33.5 9 068 271 10.2 25 775 2 527
2009 31.0 30.1 9 343 311 11.0 31 469 2 861
2010
2011
2012
2013
29.9
15.2
20.4
22.3
28.2
22.4
21.9
35.2
9 960
10 375
12 187
16 740
353
463
586
475
18.1
13.0
17.8
19.3
36 233
30 533
46 389
185 084
2 002
2 346
2 601
9 589
Source: DMR, Directorate Mineral Economics
Source: # RSA, Commissioner for South African Revenue Services, 2002-2013
Notes: Import figures also include “other kaolinitic clays”
Bentonite production increased by 47.0 percent to 177.2 kt in 2013 from 120.6 kt. Demand from the
foundary and the ferrochrome end markets strengthened in 2013, providing for a huge increase throughout
the year. Furthermore, local sales volumes increased by 6.0 percent from 159.9 kt in 2012 to 169.6 in
2013, while local sales value increased by 2.9 percent to R123.1 million (Table 104). Although the local
sale price was slightly depressed, increased volumes sold locally offset a decline in local sales revenue.
There was a significant increase (28%) in the export volumes of bentonite sold on the export market in
2013. This increase resulted from an increase in drilling oil activity globally.
Bentonite is currently used in many other construction projects in South Africa. Ecca Holdings supplies
bentonite to Eskom‟s Medupi project. Some of the bentonite produced in the country is used as a binder at
Xstrata Process Support (Glencore). High transportation costs continue to affect bentonite prices, creating
a continued challenge for suppliers since consumers cut on demand when prices are high.
234
TABLE 104: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF BENTONITE, 2002-
2013
YEAR
PRODUCTION
LOCAL SALES
EXPORTS
Mass
Kt
Value (FOR) Mass Value (FOB)
Kt R‟000 R/t Kt R‟000 R/t
2002 101.1 67.8 32 916 485 10.0 4 065 408
2003 145.1 74.4 31 210 420 11.0 3 728 338
2004 55.9 75.5 35 662 473 10.5 5 956 566
2005 139.8 75.9 35 738 471 6.9 4 778 688
2006 32.9 75.1 39 005 520 4.0 2 887 715
2007 45.8 87.3 49 749 570 3.2 2 434 761
2008 44.1 96.1 64 670 673 3.4 4 399 1 294
2009 40.3 59.8 37 585 628 1.8 2 529 1 393
2010
2011
2012
2013
82.3
120.4
120.6
177.2
124.6
177.0
159.9
169.6
82 594
118 344
119 629
123 077
659
669
748
726
1.3
0.165
0.021
0.080
1 667
255
29
139
1 293
1 551
1 412
1 749
Source: DMR, Directorate Mineral Economics
About 90 percent of attapulgite is used for cat litter and the rest for environmental purposes (filtration of
various products – acid, water, and oil). South Africa‟s production of attapulgite increased by 34 percent to
21.2 kt in 2013 from 15.8 kt in 2012 mainly driven by an increased demand for cat litter. Volumes sold
locally decreased by 3.0 percent to 15.4 kt in 2013 whilst the corresponding sales value increased by 17.4
percent to R8.4 million (Table 105). Attapulgite, like the rest of the clay minerals, has seen improved
demand during 2013. Although the industry is mostly driven by local demand, recently there has been a
growing niche market in drilling mud worldwide.
235
TABLE 105: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF ATTAPULGITE,
2002-2013
YEAR
PRODUCTION
LOCAL SALES
EXPORTS
Mass
Kt
Value (FOR) Mass Value (FOB)
Kt R‟000 R/t T R‟000 R/t
2002 13.3 11.0 5 883 535 0 - -
2003 14.6 14.5 6 750 466 0 - -
2004 20.4 20.2 8 962 443 0 - -
2005 33.7 29.8 10 785 362 0 - -
2006 49.2 49.0 13 201 270 0 - -
2007 68.4 68.4 17 989 263 0 - -
2008 69.9 69.9 20 783 297 0 - -
2009 54.4 54.2 16 015 295 0 - -
2010
2011
2012
2013
57.6
14.4
15.8
21.2
57.3
14.4
15.9
15.4
17 585
6 572
7 171
8 417
290
455
452
547
0
0
0
0
-
-
-
-
-
-
-
-
Source: DMR, Directorate Mineral Economics
The consumption of kaolin is led by Asia accounting for 36 percent of demand, Europe and North America
accounting for 30 percent and 24 percent respectively. The largest proportion of kaolin production is
consumed by the paper industry, though the mineral is also used as a filler, particularly ground and
precipitated calcium carbonate. The paper industry consumes about 50 percent while the other 50 percent
is consumed by all the other end users.
Production in North America has been declining because of the competition with calcium carbonate and
imports from Brazil, leading to industry consolidation. This competition has fuelled global consolidation in
the kaolin market since 2008. The major producing companies that were operating in the 1980s
consolidated to about 12 in the 1990s and, the number has even reduced further to six companies. Imerys
is the market leader with KaMin, Thiele, Sibelco, AKW (Quartzwerke) and Basaf being the other
participants. Imerys now controls PPSA (Para Pigmentos SA) and has recently completed the acquisition
of Goonvean. In Southwest England, Sibelco now controls the kaolin deposits in Devon (Lee Moor) whilst
Imerys controls all kaolin deposits and operations in Cornwall.
About 53 percent of bentonite production is consumed by the absorbents and the drilling mud end-markets.
With the increasing global demand for gas and oil, consumption in the oilfield market has expanded,
although the idea of hydraulic fracturing (fracking) has not yet been fully embraced in most countries owing
to the impact on environment.
236
PRICES
The kaolin price for No 1 paper coating grade increased by 1.0 percent by the end of 2013 compared with
2012, while No 2 paper coating grade, ex-works USA also increased by 7.5 percent in 2013 compared with
2012 (Table 106). The prices for cat litter grade FOB Kandla and FOB European port remained unchanged
in 2012 and 2013.
US bentonite (ex-works Wyoming) remained stable except for the American Petroleum Institute (API)
grade, bagged, railcars, ex-works Wyoming and Iron Ore Pelletising (IOP) grade, crude, bulk, ex-works
Wyoming. The API grade increased from a range of $97-122/s.ton in 2012 to a range of $97-124/s.ton by
the end of 2013 as a result of increased production logistics and energy costs. The Iron Ore Pelletising
(IOP) grade remained constant at a range of $62-77s.ton in 2013. The Indian, crushed, dried, loose, in
bulk, cat litter grade prices have now remained constant for three consecutive years since 2010. The
largest global producer of kaolin, Imerys, will now be subjected to price control for the supply of kaolin,
following its acquisition of Goonvean.
TABLE 106: WORLD PRICES OF KAOLIN AND BENTONITE, 2012-2013
KAOLIN 2012 2013
No 1 paper coating grade $161-209 $163-211
No 2 paper coating grade $107.50-166.70 $110.93-168.43
BENTONITE 2012 2013
Cat litter, grade 1-5 mm, bulk, FOB Main European port €42-60 €42-60
Indian, cat litter grade, crushed, dried, loose, in bulk, FOB Kandla $34-38/s.ton $34-38/s.ton
Oil Companies Materials Association (OCMA)/Foundry grade,
crude and dried, bulk, FOB Milos €60-80 €60-80
American Petroleum Institute (API) grade, bagged, railcars, ex-
works Wyoming $97-122/s.ton $97-124/s.ton
Foundry grade, bagged, railcars, ex-works Wyoming $90-130/s.ton $90-130/s.ton
Iron Ore Pelletising (IOP) grade, crude, bulk, ex-works Wyoming 66-72/s.ton 66-72/s.ton
Source: Industrial Minerals
EMPLOYMENT
South African special clays industry consists of 9 companies employing a total of 328 employees.
Employment in the sector decreased by 2.7 percent compared with 353 in 2012, due to lay off of
employees for completed projects. Remuneration increased by 5.8 percent from R35.2 million in 2012 to
237
R37.2 million in 2013. Each employee generated R113.300 thousand in 2013, an increase of 13.8 percent
when compared with R99.600.
TABLE 107 - SOUTH AFRICA‟S SPECIAL CLAYS EMPLOYMENT, 2009-2013
Year Employees Remuneration
2009 249 18 945 656
2010 294 22 604 229
2011 333 31 501 001
2012 353 35 154 401
2013 328 37 188 650
Source: DMR, Directorate Mineral Economics
OUTLOOK
The kaolin market struggled with the threat of substitution and the dramatic consolidation of the industry,
but lately kaolin is slowly reclaiming its position as the preferred material in the paper and pulp industry.
South Africa‟s kaolin output is expected to continue rising as demand from the construction industry
strengthens, on the back of government‟s infrastructural programmes that are in the pipeline.
The global kaolin market is projected to continue growing at the back of a number of global projects online
for the paper industry. The key factor that is leading to this growth is the abundant sources of good quality
kaolin in many parts of the world. However, demand is expected to increase as GDP of most countries
increases. According to the Industrial Minerals Magazine, worldwide consumption of paper and board is set
to grow by approximately 2-2.5 percent for the next two decades. Prices are forecast to increase slightly
but not to largely affect demand.
The future for the bentonite industry seems promising as clay is both low cost and found in abundance
across the country, making it a mineral of choice for many markets like oil-field, iron ore pelletisation and
pharmaceuticals. Bentonite demand from the oil-field market is likely to increase in the near future.
Logistics costs and energy issues are expected to plague most industrial minerals markets which are high
bulk with low revenue. However, strong demand from the end-markets, such as clay uses in niche markets
like the drilling rigs, can be expected to steady the market supply situation for minerals like bentonite.
According to the Industrial Minerals Magazine, global production of bentonite is expected to increase by
approximately 2.5 percent per annum to 17 Mt by 2016. Prices are expected to increase further, as
demand for minerals increases. Therefore, larger exploration programmes into difficult mining areas will be
required.
South Africa‟s production of bentonite is forecast to continue increasing taking advantage of projects like
Eskom‟s Medupi. The country‟s approval of exploration for shale gas and oil could raise this further. This
238
signals a potential growth of the bentonite industry as bentonite can be used as a drilling fluid. The
continued influx of imports is expected to put some downward pressure on local prices, as competition for
customers increases from the foundry markets.
REFERENCES
1. Industrial Minerals magazine 2013,2014
2. Mike Faure, Atta Clay: Attapulgite, personal communication
3. Roskill Information Services, Ltd.
4. Mineral Economics Directorate, DMR
5. The Fredonia Group Inc
6. USGS. Mineral commodities, 2014
7. Verdine Donnelly, Ecca Holdings/SAMREC: Bentonite and Attapulgite, personal communication
8. Richard da Silver, G & W Base and Industrial Minerals, personal communication
9. DMR, Special Clays Industry In The Republic of South Africa,2009
239
SULPHUR
Mphonyana Modiselle
SUPPLY AND DEMAND
WORLD
World production of sulphur in all forms (SAF) increased slightly by 700 kt from 68.1 Mt in 2012 to 68.8 Mt
in 2013 as fertiliser demand stabilised. In the fertiliser industry, sulphur is used to process the phosphate
rock into phosphate fertilisers. China was the largest producer accounting for 14 percent, followed by the
United States of America (USA) at 13 percent, Russia at 11 percent (Fig. 1).
FIGURE 81: WORLD PRODUCTION OF SULPHUR BY COUNTRY, 2013
Source: USGS, 2014
Supply has been rising in line with increased activity in the production of oil and gas, where sulphur is a by-
product and the balance depends on the fertiliser demand growth. According to CRU group one of the
most prominent features of the sulphur and sulphuric acid market in 2013, was the fall of demand, which
affected both markets. Demand from the phosphate market contracted in 2013, as India retreated from its
global buying position when its currency depreciated heavily against the dollar. Because of its use in the
phosphates industry, demand for sulphur is closely linked to phosphate rock consumption. Phosphates
have been particularly affected with subdued buying of Diammonium phosphate (DAP) from India. DAP
fertilisers saw reduced demand in 2013 because of unfavourable crop market conditions and competition
from cheaper nutrient products, particularly in India. The knock-on effect in the sulphur market was
extensive, with largest sulphur importer, China, staying away.
China 14%
United States of America
13%
Russia 11%
Canada 9%
Saudi Arabia 6%
Germany 5%
Japan 5%
Kazakhstan 4%
Other 33%
240
SOUTH AFRICA
In South Africa, elemental sulphur is recovered from pyrite, sulphide smelter gasses mainly in the platinum
mining industry, coal and crude oil. Most elemental sulphur is converted to sulphuric acid. In 2013, most of
the sulphur was recovered as a by-product from one oil refinery/ synthetic fuels producer, nineteen
platinum mines, two zinc mines and one copper mine.
South Africa‟s production of SAF increased by 5.1 percent from 257 kt in 2012 to 270 kt in 2013. SAF
includes elemental sulphur and sulphuric acid. Sulphur recovery from synthetic fuels registered a 3.5
percent increase to 159 kt in 2013. Stable operations as well as the good performance during planned
shutdowns resulted in improved production volumes.
Sulphuric acid production from the copper mine, Palabora Mining Company (PMC) increased by 11.8
percent to 76.9 kt in 2013 as production recovered from a number of challenges experienced in 2012.
These included amongst others; failure of hoisting winder bearing and tail rope, underground and smelter
industrial actions. There was no sulphuric acid production from zinc mines in 2013 owing to the closure of
the Exxaro Base Metals‟ Zincor mine, the only by-product producer which has been operational. Sulphuric
acid production from PGM mines decreased by 0.4 percent to 34.0 kt in 2013, owing to mine closures,
declining labour efficiencies, falling ore grades as well as failure to ensure the timely commissioning of
replacement projects.
TABLE 108- SOUTH AFRICA‟S PRODUCTION OF SULPHUR IN ALL FORMS, 2012-2013
SOURCE 2012 2013
Mass Mass
T % t %
Oil refineries / Synthetic fuels 153 905 60 159 270 59
Gold mines 0 0 0 0
Copper mines 68 773 27 76 891 28
Zinc mines 196 0.08 0 0
PGM mines 34 145 13 34 012 13
257 019 100 270 173 100
Source: DMR, Directorate Mineral Economics
241
TABLE 109 – SOUTH AFRICA‟S PRODUCTION AND SALES OF SULPHUR IN ALL FORMS, 2003-2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Mass Value Mass Value
Kt Kt Kt R'000 R/t Kt R'000 R/t
2003 614 480 237 783 495 32 21 799 671
2004 633 390 201 706 517 69 47 677 692
2005 776 481 231 118 481 103 65 592 638
2006 643 351 181 450 517 124 77 919 630
2007 642 358 212 258 593 125 96 571 770
2008 571 315 548 705 1 740 110 351 860 3 190
2009 536 332 293 105 883 62 27 193 436
2010 375 256 168 911 660 96 48 795 511
2011
2012
338
257
217
150
116 645
123 405
538
821
121
125
199 581
241 351
1 658
1 924
2013 270 133 67 127 506 141 231 606 1 647
Source: DMR, Directorate Mineral Economics
The SAF mass sold locally decreased by 11.3 percent to 133 kt in 2013 compared with 150 kt in 2012. The
corresponding local sales value plummeted by 45.6 percent to R67.1 million in 2013 compared with R123.4
million in 2012 owing to reduced demand. Export sales mass of SAF increased by 12.8 percent from 125 kt
in 2012 to 141 kt in 2013 (Table 109). Sales value from exports declined by 4 percent to R231.6 million in
2013 compared with R241.4 million in 2012. Price per ton of sulphur sold on the export market has gone
up in response to the increased demand from the export and the exchange rate.
TABLE 110 – SOUTH AFRICA‟S IMPORTS OF SULPHUR, 2007 – 2013
YEAR
CRUDE/UNREFINED
SUBLIMED & OTHER+
TOTAL
Mass Value (FOB) Mass Value (FOB) Mass Value (FOB)
Kt R‟000 R/t Kt R‟000 R/t Kt R‟000 R/t
2007 599 365 921 610 78 87 705 1 124 677 453 626 670
2008 791 3 436 560 4 344 173 754 037 4 358 964 4 190 597 4 347
2009 525 354 611 675 46 10 141 220 571 364 752 639
2010 593 377 801 637 63 51 396 816 656 429 197 654
2011
2012
2013
715
506
489
1 073 705
843 456
530 362
1 502
1 667
1 085
191
94
160
336 572
124 605
223 846
1 762
1 326
1 399
906
600
649
1 410 277
968 061
754 208
1 557
1 613
1 162
Source: RSA, Commissioner for South African Revenue Service, 2007 – 2013
Notes: + All forms of sulphur other than those specifically referred to
242
South Africa‟s imports mass of SAF increased by 8.2 percent from 600 kt in 2012 to 649 kt in 2013 while
imports value decreased by 22.1 percent to 754 kt in 2013 compared with 968 kt in 2012 (Table 110).
South Africa imports sulphur mainly from Canada, United Arab Emirates, Saudi Arabia, Kuwait and Qatar.
PRICES
The CRU group indicates that sulphur prices were affected globally, with a fall in demand for sulphur felt in
most regions. Since the price for sulphuric acid is strongly related to that of sulphur, the price of sulphuric
acid therefore also succumbed to demand side fundamentals in 2013. According to the Industrial Minerals
publication, after months of weakness, prices began to look up towards the end of 2013. This is reportedly
due to an uptick in demand from Chinese phosphate producers.
RECENT DEVELOPMENTS
The South African government has taken steps to formulate and implement measures to mitigate climate
change. These steps are informed by the country‟s commitment to reduce its emissions below a baseline
of 34 percent by 2020 and 42 percent by 2025. The primary approach to adapting to the impact of climate
is to strengthen the national resilience and this involves: decreasing poverty and inequality, increasing
levels of education, improving healthcare, creating employment, promoting skills development and
enhancing integrity of ecosystems.
In support of the country‟s goal in moving towards a greener economy, the Department of Energy
announced the initiative, Cleaner Fuels Program 2 (CF2), on the 1st June 2012, which is envisaged to be
completed by 2017. The clean fuel standards call for upgrade to all existing refineries and stipulate a
reduction in sulphur, benzene, aromatics levels in petrol and diesel produced. The government has set
aside, through the National Treasury, R40 billion to upgrade the country‟s oil refineries to produce low
sulphur fuels.
In line with the programme, BP one of the major oil producers is investing R 2.5 billion to upgrade its South
African Petroleum Refineries (Sapref) refinery in Durban, KwaZulu Natal Province to meet clean fuel
specifications to align with the governments‟ 2017 implementation plan. Sapref is a 50 percent joint venture
between Shell SA refining and BP SA. The adoption of the National Development Plan (NDP) as the road
map to economic transformation for South Africa has inspired confidence to companies like BP, who made
commitments to create more jobs and build entrepreneurs in South Africa. The investment will be spent
over a number of projects across BP‟s fuel value chain, including refineries, terminals and retail network
assets.
National Petroleum and Refiners of South Africa (Natref), a 50 percent joint venture between Sasol and
Total, is also planning clean fuel projects. According to Hydrocarbon Processing publication, the company
is upgrading its refinery to reduce concentrations of sulphur in both petrol and diesel, to meet the Euro 5
specifications for transportation fuels. Euro 5 specifications entails developing fuels to contain 10 parts per
243
million (ppm) or less sulphur, lowering of benzene from 5 percent to 1 percent and the reduction of
aromatics from 50 percent to 35 percent.
Petroleum Oil and Gas Corp of South Africa (PetroSA) has proposed construction of a new 400 000 barrels
a day oil refinery at Coega near Port Elizabeth, known as Project Mthombo (also known as the Coega
plant). If the refinery is built, the refinery would be made to meet the clean fuel standards. According to
PetroSA, the refinery could reduce the shortfall in locally refined diesel and gasoline by 2020, if there is no
significant investment in domestic refinery capacity and the project cost is estimated at $ 10 billion.
PetroSA and Sinopec are jointly funding a study for the construction of the refinery, but no official decision
to undertake the venture has been made.
OUTLOOK
According to International Fertilizer Industry Association (IFA), global production of elemental sulphur is
projected to grow by 31 percent over 2013, to reach 73.3 Mt sulphur (S) in 2018, owing to higher recovery
of sulphur from the oil and gas sectors. Global consumption of elemental sulphur is projected to grow at an
annual rate of 3.8 percent over 2013, to 70.4 Mt of sulphur in 2018. This increase will mainly be driven by
firm growth of sulphuric acid consumption in industrial segments (particularly in ore leaching operations)
and by recovery in the demand for fertilisers. Supply is growing faster than demand, driven by oil and gas
markets; however, this steady growth may lead the industry into a sulphur oversupply in the near future,
unless demand for sulphur can keep up. However, expected increase in the fertiliser industry will be a
catalyst for the demand of sulphur. This is supported by forecast from the institutions like The Sulphur
Institute (TSI), which indicates that global population and consumption growth is expected to double food
demand by 2050.
To meet the expected food demand growth, strategies to increase food production are an imperative for
any nation. Continuing plans and programmes towards securing food for the country are underway, in line
with government„s commitment to secure food for all South Africans. Collective efforts including studies to
demonstrate the strong linkages between the mining and the agricultural industries will make a significant
contribution towards the sustainability of both sectors which is likely to ensure food security.
2013 was a turbulent year for sulphur markets owing to its close link to the fertiliser industry, as values
were marked down very sharply in reflection of weak phosphate demand. However, the Fertiliser
International states that more bullish sentiments are forecasted as the markets renew their firmness from
2014 onwards. New phosphate fertiliser projects are preparing for commissioning within the next five
years, mainly in Middle East, North Africa, Brazil and China. This is a positive indication of a strong
demand for sulphur.
The demand outlook is largely driven by the phosphate fertiliser sector. Sulphuric acid prices are set to
remain stable as long as contractual volumes are lifted and adequate spot demand emerges. In the
medium term, the supply surplus coupled with a recovering demand will serve to keep prices low, but with
244
demand recovering towards 2015 to 2016 and new supply coming online, the price of sulphur is very much
likely to recover. The rise in sulphur prices will be particularly from China, fuelled by speculative purchases
by traders. Since the Chinese market influences demand for phosphate consumption, making up the
largest demand sector for sulphur and sulphuric acid.
REFERENCES
1. Chapter 5: Transition to a low-carbon economy, National Planning Commission (NPC), National Development Plan (NDP)
2. David Furlonger, 02 April 2014, BDlive, Refineries R40 billion upgrade faces delay
3. DMR, Directorate Mineral Economics
4. Fertilizer International Magazine, 2013-2014
5. Industrial Minerals Magazine, 2012-2014
6. Kimberley Gustin, 07 February 2014, CRU group, Around the world in 12 months: Sulphur and Sulphuric acid Perspective
7. Leandi Kover, 07 January 2014, Mining Weekly, South African platinum market remain uncertain during 2014
8. Lynley Donnelly, 26 April 2013, Mail and Guardian, BP upgrades Durban refinery to meet clan fuel specs
9. Ober, J., 2014, Sulphur Review, USGS [pdf]. Internet. http://www.usgs.gov
10. Palabora Mining Company (PMC) Annual Report 2013 and Provincial Results
11. Patrick Heffer and Michel Prud‟homme, 2014, IFA, Fertiliser Outlook 2014-2018
12. Renier Jordaan, Sasol Nitro, personal communication
13. Sasol Annual Report 2013
14. South Africa –Africa‟s clean fuels leader?, July 2014, Hydrocarbon Processing
15. South Africa- Analysis, 28 Feb 2014, US Energy Information Administration (EIA)
16. South African Revenue Services
17. Sulphur magazine, 2013-2014
245
VERMICULITE
Munyadziwa Muravha
SUPPLY DEMAND
World vermiculite production continues to increase as different companies worldwide execute long awaited
expansion plans. World production is estimated to have increased by 10.5 percent to 420 kt in 2013
compared with 380 kt in 2012. Most of the vermiculite producing companies experienced an increase or
were consistent in production.
FIGURE 82: WORLD PRODUCTION OF VERMICULITE BY COUNTRY, 2013
Source: USGS, 2013
South Africa remained the world‟s largest producer contributing about 31 percent to total production,
followed by Virginia Vermiculite in USA at 24 percent, Basil‟s Minerios Ltd of Brazil at 13 percent and China
at 12 percent.
Palabora Mining Company now known as Palabora Copper (PC) is the world‟s largest producer of
vermiculite and South Africa‟s sole vermiculite producer. SA‟s production of vermiculite decreased by 3.93
percent to 127.7 kt in 2013 (Table 111) compared with 132.9 kt in 2012. PC‟s production in 2013 was less
than the mines optimal capacity. However, improved mine planning and more efficient recovery is resulting
in the right quantity of grades for the market.
Local sales tonnages increased by 14.5 percent to 8.6 kt in 2013 compared with 7.5 kt in 2012, while local
sales values increased by 13.8 percent to R17.9 million in the same period, due to stronger demand.
Export volumes increased by 22.6 percent to 118.3 kt in 2013, while export sales values increased by 36.0
United states 24%
Brazil 13 %
Bulgaria 5%
China 12%
India 5%
Russia 6%
South Africa 31%
Uganda 3%
Other countries 2%
246
percent to R380.5 million, owing to increased supply distribution on finer grades, which the consumers
have now adjusted to.
TABLE 111: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF VERMICULITE,
2003 – 2013
YEAR PRODUCTION LOCAL SALES EXPORTS SALES
Mass Mass Value (FOR) Mass Value (FOB)
kt kt R‟000 R/t kt R‟000 R/t
2003 182.8 6.5 5 114 784 163.3 144 759 886
2004 196.9 7.3 6 229 855 178.8 150 944 844
2005 209.9 6.9 6 368 923 163.7 188 402 1 151
2006 197.8 7.6 7 087 927 166.7 170 029 1 056
2007 198.5 9.1 8 896 981 173.2 195 577 1 129
2008 199.8 10.7 11 002 1 026 204.5 273 239 1 336
2009 193.3 9.5 10 236 1 073 164.6 238 295 1 448
2010 199.3 10.4 12 927 1 241 166.5 216 305 1 299
2011 167.5 9.6 16 576 1 722 162.4 328 921 2 215
2012 132.8 7.5 15 692 2 102 96.5 279 696 2 898
2013 127.7 8.6 17 861 2 088 118.3 380 489 3 215
Source: DMR, Directorate Mineral Economics
Production of sufficient quantities of coarse grained grades by PC became increasingly challenging in 2011
when the company could not meet a substantially increasing world demand. However, more efficient
mining in the last few years has resulted in the production of more medium and fine grades. Both these
grades have been in short supply, and the ability of the company to supply will definitely benefit the
country.
Vermiculite is used in five principal applications: agriculture, refractory bricks, fire proofing, metallurgical
and construction industries. Smaller niche markets include: animal feeds, brake linings, sanitation and
packaging. Other opportunities exist in the manufacturing of insulating material, and sound proofing
industries. Horticulture accounts for at least 50 percent of vermiculite end markets followed by light weight
concrete at 20 percent and insulation at 5 percent (Fig. 2). The agricultural/horticulture end market has
always been the biggest consumer of vermiculite and continues to grow. In horticulture and agriculture,
vermiculite is used for different purposes: retention of soil moisture and hosting a number of mineral
fertilisers such as ammonium, potassium, calcium and magnesium. Vermiculite faces the challenge of
many other substitutes that are denser but less costly, which have become better alternatives in the market
such as expanded perlite, shale, clay and slag.
247
FIGURE 83: VERMICULITE CONSUMPTION BY SECTOR, 2013
Source: USGS Commodity Summaries 2013
South Africa‟s export volumes increased by 22.6 percent from 96.5 kt to 118.96.5 kt in 2013, with Europe
being the main market for SA‟s vermiculite and North America and Asia showing big potential for growth for
SA‟s vermiculite markets. Supplies of coarse grade vermiculite was very tight and prices rose slightly up
once more in 2013. Imports into the USA decreased by 13 percent in 2013 as compared to 2012.
PRICES
Although the cost of mining vermiculite is increasing, producers have no plans to increase the price of their
bulk concentrate at present. Tight supply conditions have been the driver of the rocketing vermiculite prices
in the past years, but recently, customers have been adjusting to finer grains. Vermiculite prices depend
largely on size, with coarser grades commanding much higher prices. Prices that had risen significantly in
mid-2011 as a result of limited supply. Prices then began to level off in 2012 as suppliers reduced prices in
a bid to hold on to market share. Concentrate (bulk FOB Antwerp) prices ranged from $315-715/t in 2013,
a 15 percent decrease from $400-850/t throughout 2012 (Fig. 3).
Agriculture 50%
Light weight Concrete 20%
Insulation 5%
Other 25%
248
FIGURE 84: VERMICULITE PRICES, 2006-2013
Source: Various editions of Industrial Minerals Magazine
DEVELOPMENTS
Dupre Minerals in Uganda was on care and maintenance status as a result of oversupply of the medium to
finer grades in the world market as well as transportation and related infrastructure improvements issues.
Dupre Minerals did not mine vermiculite, but removal of overburden continued at the mine. Consequently
Uganda contributed 3 percent to the overall world production in 2013, down by 3 percent compared to
2012.
In December 2013, Palabora Mining Company was sold to a consortium of South African and Chinese
private and parastatal companies. Rio Tinto and Anglo American PLC, sold their respective 57.7 percent
and 16 percent stakes in Palabora Mining Company to state-owned Industrial Development Corporation
(IDC) and a Chinese consortium including private-owned Hebei Iron Steel Group, state owned Tewoo
Group Co. Ltd and privately-owned General Nice Development Ltd. The company plans to move back to
producing 150 kt by the end of 2015. Production capacity of PC is about 200 kt/pa. Expansion of the mine‟s
operation will extend the mine lifetime to over 24 years. This has resulted in creation of new sections within
the company, in turn increasing the number of employees.
OUTLOOK
South Africa‟s PC has laid out significant expansion plans, which could see prices fall as soon as additional
output comes online. Production at PC is expected to increase as the company tries to reach its capacity of
200 kt. The year 2014 has seen significant rises in fuel and electricity, continuously putting a strain on the
cost of vermiculite. However, as producers adjust to these costs, vermiculite prices are also stabilizing
slowly. Consequently, transportation costs, especially higher fuel prices might mitigate against a significant
decrease in prices.
0
100
200
300
400
500
600
700
800
900
1000
2006 2007 2008 2009 2010 2011 2012 2013
Pri
ces
($/t
)
Year
249
Despite plans to raise the current production capacity, PC‟s production is forecast to increase on the back
of growing horticulture/agriculture markets. Vermiculite end-use-markets are also growing, indicating a
rising demand ahead. Horticulture and agricultural end-markets continue to be strong and will continue to
see growth in vermiculite demand. This is an exciting opportunity for the vermiculite industry.
The construction end market has not been performing well, but is expected to improve as government
ramp up lined up infrastructural programmes. The government‟s Strategic Infrastructural Projects (SIPs)
could create the much needed employment opportunities and further alleviate poverty.
World supply of vermiculite is on the rise and is still expected to continue increasing as producers around
the world are expanding their operations to ramp up capacity. Amongst many other companies that are
already busy with expansion plans, Brasil Minerios of Brazil aims to expand its production capacity to 200
kt pa in 2016, while Uganda Gulf Industrials is planning to increase its capacity to 50 kt pa in 2014 .Global
demand for larger grades continues to be strong although supply distribution is increasing on finer grades
as consumers try to contain costs. With the prices of vermiculite decreasing and coarse grained supply
stabilizing, 2015 will see a much more steady vermiculite industry.
REFERENCES
1. Department of Mineral Resources, Directorate Mineral Economics
2. Industrial Minerals, 2014.
3. Palabora Mining Company annual report, 2012
4. USGS commodity summaries, 2014
250
STATISTICS FOR OTHER INDUSTRIAL MINERALS
R Motsie
NOTE: The following applies to all tables.
** Withheld for reasons of company confidentiality
* Nil
1. NATURAL ABRASIVES
TABLE 112: SOUTH AFRICA‟S IMPORTS OF NATURAL ABRASIVES, 2004–2013
YEAR Mass Value (FOB)
t R‟000 R/t
2004 1 554 5 573 3 586
2005 1 706 3 610 2 112
2006 1 311 4 888 3 728
2007 1 282 6 095 4 654
2008 1 183 5 198 4 394
2009 1 208 7 419 6 141
2010 1 919 6 837 3 563
2011 2 095 6 393 3 051
2012 2 251 7 152 3 177
2012 2 251 7 152 3 177
2013 2 088 8 239 3 946
Source: RSA, Commissioner for South African Revenue Service, 2004–2013
2. BARYTES
TABLE 113.1: SOUTH AFRICA‟S PRODUCTION AND LOCAL SALES OF BARYTES, 2004–2013
YEAR PRODUCTION LOCAL SALES
Mass Mass Value (FOR)
t t R‟000 R/t
2004 * 275 116 795
2005 * 146 61 418
2006 * 126 52 413
2007 * 535 225 421
2008 * 432 181 419
2009 * 284 119 419
2010 * 319 134 420
2011
2012
*
*
189
*
79
*
420
*
2013 * * * *
Source: DMR, Directorate Mineral Economics
251
TABLE 113.2: SOUTH AFRICA‟S IMPORTS OF BARYTES, 2004–2013
YEAR Mass Value (FOB)
t R‟000 R/t
2004 3 056 7 008 2 293
2005 2 013 7 748 3 849
2006 2 736 7 908 2 890
2007 3 114 14 921 4 792
2008 3 568 14 106 3 953
2009 2 823 13 805 4 890
2010 4 105 17 200 4 190
2011 3 146 11 747 3 740
2012 2 962 11 469 3 872
2013 3 128 10 195 3 259
Source: RSA, Commissioner for South African Revenue Service, 2004–2013
3. DIATOMACEOUS EARTH (KIESELGUHR)
TABLE 114: SOUTH AFRICA‟S IMPORTS OF DIATOMACEOUS EARTH, 2004–2013
YEAR Mass Value (FOB)
t R‟000 R/t
2004 4 594 10 670 2 232
2005 5 318 12 944 2 434
2006 5 032 14 321 2 846
2007 4 828 18 930 3 921
2008 5 539 23 205 4 189
2009 3 930 16 075 4 090
2010 4 580 17 496 3 820
2011 5 261 19 572 3 720
2012 5 217 19 970 3 828
2013 4 016 18 940 4 716
Source: RSA, Commissioner for South African Revenue Service, 2004–2013
Note: Production statistics are not published because there is only one producer
252
4. FELDSPAR
TABLE 115: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF FELDSPAR,
2004–2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES+
Mass Value (FOR) Mass Value (FOB)
kt kt R‟000 R/t kt R‟000 R/t
2004 53.7 66.4 37 477 565 * * *
2005 57.5 75.2 44 256 588 * * *
2006
75.4 85.2 54 649 641 0.2 218 903
2007
90.2 106.8 62 080 581 * * *
2008 105.8 70.1 49 260 702 * * *
2009 101.4 72.9 55 248 758 * * *
2010 94.3 69.9 56 204 804 * * *
2011 101.6 98.9 61 031 617 * * *
2012 94.5 92.9 45 899 494 * * *
2013 191.4 186.5 101 444 544 * * *
Source: DMR, Directorate Mineral Economics
5. GRAPHITE
TABLE 116: SOUTH AFRICA‟S IMPORTS OF NATURAL GRAPHITE, 2004–2013
YEAR Mass Value (FOB)
t R‟000 R/t
2004 1 427 4 879 3 419
2005 1 270 3 909 3 078
2006 1 220 5 193 4 257
2007 1 008 8 207 8 142
2008 1 003 20 101 20 041
2009 921 8 657 9 400
2010 1 108 12 891 11 634
2011 1 099 54 29 49 390
2012 768 10 372 13 505
2013 704 8 390 11 925
Source: RSA, Commissioner for South African Revenue Service, 2004–2013
253
6. GYPSUM
TABLE 117.1: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES, AND CONSUMPTION OF NATURAL
GYPSUM, 2004–2013
YEAR PRODUCTION LOCAL SALES CONSUMPTION
Mass Value (FOR) FOR CEMENT+#
kt kt R‟000 R/t kt
2004 524 459 18 783 41 452
2005 547 503 18 690 37 500
2006 557 370 30 605 83 550
2007 627 388 33 517 86 543
2008 571 393 33 666 86 519
2009 598 397 36 616 92 ***
2010 513 307 32 228 105 ***
2011 476 323 36 831 114 ***
2012 558 358 56 876 159 ***
2013 559 327 58 288 178 ***
Sources: DMR, Directorate Mineral Economics
Notes: + Based on cement sales and assuming 38,5t gypsum/1 000t cement.
# Includes synthetic gypsum.
*** Not available
TABLE 117.2: SOUTH AFRICA‟S IMPORTS OF GYPSUM AND GYPSUM PLASTERS, 2004–2013
YEAR GYPSUM GYPSUM PLASTERS
Mass Value (FOB) Mass Value (FOB)
T R‟000 R/t t R‟000 R/t
2004 2 624 3 039 1 158 4 761 6 365 1 337
2005
2006
2007
2008
2009
2010
2011
2012
1 971
2 408
3 007
1 939
3 427
24 506
2 969
10 957
2 218
3 703
4 555
3 343
8 379
7 884
4 816
10 015
1 125
1 537
1 515
1 724
2 445
321
1 622
9 141
4 268
5 313
17 205
11 290
3 790
6 386
6 181
7 407
5 704
8 827
15 004
14 303
8 200
10 903
10 926
12 775
1 337
1 661
872
1 267
2 164
1 707
1 678
1 725
2013 4 058 12 321 3 036 7 685 16 493 2 146
Source: RSA, Commissioner for South African Revenue Service, 2004–2013
254
7. MAGNESITE
TABLE 118.1: SOUTH AFRICA‟S PRODUCTION AND LOCAL SALES OF MAGNESITE AND DERIVED
PRODUCTS, 2004–2013
LOCAL SALES
YEAR PRODUCTION Mass Value (FOR)
kt Kt R‟000 R/t
2004
65.9 122.9 25 513 208
2005 54.8 103.4 31 327 303
2006 73.3 110.8 35 104 317
2007 80.7 117.4 42 323 360
2008 83.9 111.1 51 864 467
2009 47.6 72.3 43 234 598
2010
2011
27.7
**
73.6
**
63 982
**
869
**
2012 ** ** ** **
2013 ** ** ** **
Source: DMR, Directorate Mineral Economics
TABLE 118.2: SOUTH AFRICA‟S IMPORTS OF MAGNESITE AND MAGNESIA, 2004–2013
MAGNESITE MAGNESIA
YEAR Mass Value (FOB) Mass Value (FOB)
kt R‟000 R /t kt R‟000 R/t
2004 11.6 15 007 1 202 42.1 62 299 1 480
2005 13.4 24 599 1 840 38.6 58 729 1 521
2006 11.2 15 444 1 379 36.2 61 115 1 688
2007 24.9 51 790 2 080 48.0 91 115 1 898
2008 15.3 39 509 2 582 36.2 136 071 3 759
2009 25.5 10 850 4 254 41.8 139 175 3 328
2010 12.3 10 389 844.6 65.7 205 594 3 129
2011 10.4 14 709 1 410 96.2 324 992 3 376
2012 11.3 22 555 1 996 50.6 185 019 3 655
2013 21.8 37 277 1 710 54.6 230 046 4 208
Source: RSA, Commissioner for South African Revenue Service, 2004–2013
255
8. MICA
TABLE 119.1: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF SCRAP AND
FLAKE MICA, 2004–2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Value (FOR) Mass Value (FOB)
t t R‟000 R/t t R‟000 R/t
2004 285 55 ** ** 766 ** **
2005 922 * * * 856 ** **
2006 828 254 1 136.7 4 480 327 2 070.0 6 331
2007 437 201 870 727 4 329 261 1 679.8 6 428
2008 426 179 ** ** 232 ** **
2009 299 245 ** ** 106 ** **
2010
2011
2012
904
633
400
794
431
185
**
**
**
**
**
**
25
174
195
**
**
**
**
**
**
2013 309 113 ** ** * * *
Source: DMR, Directorate Mineral Economics
TABLE 119.2: SOUTH AFRICA‟S IMPORTS OF MICA, 2004–2013
YEAR Mass Value (FOB)
t R‟000 R/t
2004 495 847 1 709
2005 581 1 073 1 847
2006 901 1 365 1 515
2007 865 1 667 1 928
2008 296 1 103 3 727
2009 358 933 2 608
2010 483 1 152 2 385
2011
2012
507
425
1 353
1 353
2 668
3 184
2013 633 2 997 4 524
Source: RSA, Commissioner for South African Revenue Service, 2004–2013
256
9. MINERAL PIGMENTS
TABLE 120: SOUTH AFRICA‟S PRODUCTION AND SALES OF MINERAL PIGMENTS, 2004–2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Value Mass Value
t t R‟000 R/t t R‟000 R/t
2004 512 1 027 769 749 20 44 2 181
2005 510 801 554 692 226 472 2 091
2006 590 811 751 927 * * *
2007 232 737 769 1 043 * * *
2008 39 288 94 327 * * *
2009
2010
2011
2012
183
244
226
*
119
66
19
*
40
22
7.6
*
339
340
400
*
*
*
*
*
*
*
*
*
*
*
*
*
2013 * * * * * * *
Source: DMR, Directorate Mineral Economics
10. POTASH
TABLE 121: SOUTH AFRICA‟S IMPORTS OF POTASH, 2004–2013
YEAR POTASSIUM
CHLORIDE
POTASSIUM
SULPHATE
POTASSIUM
NITRATE
TOTAL
kt R‟000 kt R‟000 kt R‟000 kt R‟000
2004 276.8 253 155 22.6 30 776 40.0 99 972 339.4 383 903
2005 198.3 241 859 39.0 58 400 30.1 85 496 267.4 385 755
2006 260.4 381 811 40.2 79 892 20.6 79 737 321.2 541 440
2007 255.4 409 632 38.8 93 446 26.0 79 083 320.2 582 181
2008 271.4 1 546 452 46.1 330 639 26.2 281 162 343.7 2 158 253
2009 139.6 618 360 24.0 129 297 14.8 101 451 178.4 849 108
2010 267.4 697 166 46.2 159 251 23.6 106 461 337.2 962 878
2011
2012
265.1
249.4
867 674
978 958
52.6
60.7
219 149
305 573
27.8
43.0
170 730
266 741
345.5
353.1
1 257 553
1 551 272
2013 274.1 1 209 391 50.5 253 304 23.0 189 429 347.5 1 652 124
Source: RSA, Commissioner for South African Revenue Service, 2004–2013
Note: Up to 10 percent of the imports were most likely for non-fertiliser uses
257
11. PYROPHYLLITE
TABLE 122: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF PYROPHYLLITE,
2004–2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Value (FOR) Mass Value (FOB)
t t R‟000 R/t t R‟000 R/t
2004 ** ** 34 824 ** 11 683 1 266 **
2005 ** ** 34 798 ** ** 6 038 **
2006 ** ** 34 576 ** ** 52 879 **
2007 ** ** 39 962 ** ** 7 483 **
2008 ** ** 42 230 ** ** 8 438 **
2009 ** ** 38 449 ** ** 9 795 **
2010
2011
2012
**
**
**
**
**
**
49 566
31 277
7 511
**
**
**
**
**
**
16 762
201 423
4 585
**
**
**
2013 ** ** 5 750 ** ** 4 944 **
Source: DMR, Directorate Mineral Economics
12. SALT
TABLE 123: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF SALT,
2004–2013
YEAR
PRODUCTION
LOCAL SALES
EXPORTS
Mass Value (FOR) Mass Value (FOB)
kt kt R‟000 R/t kt R‟000 R/t
2004 332 349 65 730 188 <1 70 168
2005 399 436 79 306 182 * * *
2006 405 425 89 583 211 * * *
2007 411 450 101 951 227 * * *
2008 430 437 123 537 282 * * *
2009 408 438 104 309 321 * * *
2010
2011
2012
394
380
399
423
440
480
126 306
139 829
155 293
298
318
324
*
*
*
*
*
*
*
*
*
2013 479 480 154 465 322 * * *
Source: DMR, Directorate Mineral Economics
258
13. SILICA
TABLE 124: SOUTH AFRICA‟S PRODUCTION, LOCAL SALES AND EXPORTS OF SILICA, 2004–2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Value (FOR) Mass Value (FOB)
kt kt R‟000 R/t t R‟000 R/t
2004 2 249 1 996 187 474 94 649 1 007 1 551
2005 2 671 2 290 189 469 83 652 1 017 1 560
2006 3 231 2 884 236 296 82 424 896 2 113
2007 3 352 2 726 280 191 103 806 1 541 1 913
2008 3 342 3 059 351 474 115 959 1 486 1 550
2009
2010
2011
2012
2 306
2 863
2 688
2 151
2 431
3 026
3 008
2 356
330 404
470 618
487 779
543 599
136
155
162
205
1 222
1 042
3 843
18 821
1 652
1 632
5 127
334 899
1 352
1 567
1 334
17 94
2013 2 198 2 428 458 457 189 10 789 28 384 2 631
Source: DMR, Directorate Mineral Economics
14. TALC
TABLE 125.1: SOUTH AFRICA‟S PRODUCTION AND SALES OF TALC, 2004–2013
YEAR PRODUCTION LOCAL SALES EXPORT SALES
Mass Value (FOR) Mass Value (FOB)
t t R‟000 R/t t R‟000 R/t
2004 8 141 8 094 4 163 514 * * *
2005 8 469 7 439 4 319 581 * * *
2006 10 966 7 134 4 957 695 * * *
2007 14 281 7 326 5 639 770 * * *
2008 5 145 6 591 5 606 851 * * *
2009 4 718 6 213 5 893 948 * * *
2010
2011
2012
3 150
4 453
4 765
5 370
5 489
5 568
5 573
6 050
7 084
1 038
1 102
1 272
*
*
*
*
*
*
*
*
*
2013 4 924 7 117 8 806 1 237 * * *
Source: DMR, Directorate Mineral Economics
259
TABLE 125.2: SOUTH AFRICA‟S IMPORTS OF TALC, 2004–2013
YEAR Mass Value (FOB) t R‟000 R/t
2004 5 480 11 713 2 137
2005 10 541 17 713 1 694
2006 9 565 20 344 2 127
2007 11 721 26 040 2 222
2008 8 142 25 114 3 084
2009 10 254 23 851 2 326
2010
2011
2012
9 818
7 126
7 696
26 908
28 015
27 556
2 741
3 931
3 581
2013 8 182 33 408 4 083
Source: RSA, Commissioner for South African Revenue Service, 2004–2013
260
PART THREE: GENERAL INFORMATION
USEFUL ADDRESSES
DEPARTMENT OF MINERAL RESOURCES HEAD OFFICE
The Director-General Trevenna Office Campus
Department: Mineral Resources Buildings 2B and 2C
Private Bag X 59 www.dmr.gov.za Corner of Francis Baard & Meintjies Street
0007 Arcadia Pretoria
Tel: (012) 444 3000
Telefax:(012) 341 4134 / 5886
SAMRAD Online Helpdesk: (012) 444 3119
SAMRAD Online e-mail: [email protected]
Statistical data submission: [email protected]
MINERAL REGULATION REGIONAL DIRECTORATES
Regional Manager: Mineral Regulation - Corner of Mount and Diaz Rd
Eastern Cape Mount Croix
Private Bag X 6076 Port Elizabeth
6000 Port Elizabeth
Tel: (041) 396 3900
Telefax: (041) 396 3945 / 373 8171
Private Bag X 5252 PRD Building
5099 Umthata 96 Sutherland Road
Umthata
Tel: (047) 532 4488
Telefax: (047) 532 4547
261
Regional Manager: Mineral Regulation - Free State DMR Building
Private Bag X 33 314 Stateway c/o Bok Street
9460 Welkom Welkom
Tel: (057) 391 1300
Telefax: (057) 357 6003 / 1241
Regional Manager: Mineral Regulation - Gauteng UCS Building
Private Bag X 5 c/o Smit and Rissik Streets
2017 Braamfontein Braamfontein
2017
Tel: (011) 358 9700
Telefax: (011) 339 1858 / 2423
Regional Manager: Mineral Regulation –Durban Bay House
KwaZulu/Natal 333 Smith Street
Private Bag X 54307 Durban
4000 Durban
Tel: (031) 335 9600
Telefax:: (031) 301 6950
Regional Manager: Mineral Regulation –Receiver of Revenue Building
Mpumalanga cnr Paul Kruger and Botha Avenue
Private Bag X 7279 Emalahleni
1035 Emalahleni
Tel: (013) 653 0500
Telefax: (013) 690 3288
Regional Manager: Mineral Regulation - Perm Building
Northern Cape 65 Phakamile Mabija Street
Private Bag X 6093 Kimberley
8300 Kimberley
Tel: (053) 807 1700
Telefax: (053) 832 5631 / 830 0827
262
Private Bag X 14 Hopley Centre
8240 Springbok c/o Van Der Stel & Van Riebeeck Street
8240 Springbok
Tel: (027) 712 8160
Fax: (027) 712 1959
Regional Manager: Mineral Regulation – Limpopo Broll Building
Private Bag X 9467 101 Dorp Street
0700 Polokwane Polokwane
Tel: (015) 287 4700
Telefax: (015) 287 4729
Regional Manager: Mineral Regulation - North-West Vaal University of Technology Building
Private Bag A1 Corner Margaret Prinsloo & Voortrekker Str
2570 Klerksdorp Klerksdorp
Tel: (018) 487 9830
Telefax: (018) 487 9831 / 9836 / 462 9039
Regional Manager: Mineral Regulation - 9 th Floor, Atterbury House
Western Cape Corner Riebeeck and Lower Burg Str
Private Bag X 9 Cape Town
8012 Roggebaai
Tel: (021) 427 1000
Telefax: (021) 427 1046 / 1047
The Principal Inspector: Mine Health and Safety – Propcor Building
Rustenburg cnr Beyers Naudé and Unie Streets
PO Box 150 Rustenburg
0309 Tlhabane
Tel: (014) 594 9240
Telefax: (014) 594 9260
263
ASSOCIATED GOVERNMENT DEPARTMENTS
Department of Energy c/o Visagie and Paul Kruger Streets
Private Bag X 96 www.energy.gov.za Pretoria
0001 Pretoria
Tel: +27 (0) 12 406 8000 / 7300
Fax: +27 (0) 12 406 7788
Department of Environmental Affairs Fedsure Forum Building
Private Bag X 447 www.environment.gov.za North Tower
0001, Pretoria Cnr Lillian Ngoyi & Pretorius Street
Tel: +27 (0) 12 310 3911
Fax: +27 (0) 12 322 2682
Department of Rural Development & Land Reform Cnr Jacob Mare & Paul Kruger Street
Private Bag X 833 www.ruraldevelopment.gov.za Pretoria
0001, Pretoria
Tel: +27 (0) 12 312 8911
Fax: +27 (0) 12 323 6072
+27 (0) 12 312 8066
Department of Science and Technology CSIR Campus (South Gate Entrance)
Private Bag X 894 Meiring Naudé Road, Brummeria
0001, Pretoria www.dst.gov.za Pretoria
Tel: +27 (0) 12 843 6300 / 6303
Fax: +27 (0) 12 349 1037
Department of Trade and Industry DTI Campus – Block E
Private Bag X 84 www.thedti.gov.za Cnr Robert Sobukwe & Meintjies Streets
0001 Pretoria Sunnyside, Pretoria
Tel: +27 (0) 861 843 384
Telefax: +27 (0) 12 394 4612 / 0517
+27 (0) 861 843 888
264
Department of Water Affairs Sedibeng Building
Private Bag X 313 www.dwaf.co.za 185 Francis Baard Street
0001 Pretoria Pretoria
Tel: +27 (0) 12 336 7500 / 6696
Fax: +27 (0) 12 326 2715 / 336 8850
+27 (0) 12 324 6592
Statistics South Africa De Bruyn Park
Private Bag X 44 www.statssa.gov.za 170 Thabo Sehume Street
0001, Pretoria Pretoria
Tel: +27 (0) 12 310 8911
Fax: +27 (0) 12 310 8500 / 8495
STATE OWNED ENTERPRISES
Council for Geoscience 280 Pretoria Road
Private Bag X 112 www.geoscience.org.za Silverton
0001 Pretoria Pretoria
Tel: +27 (0) 12 841 1911
Telefax: +27 (0) 12 841 1221
CSIR Meiring Naude Road
PO Box 395 www.csir.co.za Brummeria
0001 Pretoria Pretoria
Tel: +27 (0) 12 841 2911
Telefax: +27 (0) 12 349 1153
265
CSIR – Mining Technology (Miningtek) cnr Carlow & Rustenburg Avenue
PO Box 91230 www.csir.co.za/miningtek Mellville
2006 Auckland Park Johannesburg
Tel: +27 (0) 11 358 0000
Telefax: +27 (0) 11 726 5405
Eskom Megawatt Park
PO Box 1091 www.eskom.co.za Maxwell Drive
2000 Johannesburg Sunninghill Ext 3
Sandton
Tel: +27 (0) 11 800 8111
Telefax: +27 (0) 11 800 4299
Mine Health and Safety Council Woodmead Business Park
Private Bag X 63 www.mhsc.org.za 145 Western Service Road
Braamfontein Maple North Building
2017 Woodmead
Tel: +27 (0) 11 656 1797
Fax: +27 (0) 11 656 1796
Mining Qualifications Authority 7 Anerley Road
Private Bag X 118 www.mqa.org.za Parktown
Marshalltown Johannesburg
2107
Tel: +27 (0) 11 832 1022
Fax: +27 (0) 11 832 1027
Mintek 200 Malibongwe Drive
Private Bag X 3015 www.mintek.co.za Randburg
2125 Randburg
Tel: +27 (0) 11 709 4111
Telefax: +27 (0) 11 793 2413
266
Petro SA 151 Frans Conradie Drive
Private Bag X5 www.petrosa.co.za Cape Town 7500
Parow, Cape Town
7499
Tel: +27 (0) 21 929 3000
Telefax: +27 (0) 21 929 3144
NECSA Elias Motswaledi Street, West Extension
PO Box 582 www.necsa.co.za Pelindaba, Brits District
0001 Pretoria
Tel: +27 (0) 12 305 4911
Telefax: +27 (0) 12 305 3111
South African Agency for Promotion of Tygerpoort Building
Petroleum Exploration and Exploitation (Pty) Ltd 7 Mispel Street
Petroleum Agency SA Bellville 7530
PO Box 5111 www.petroleumagencysa.com
Tygervalley
7536
Tel: +27 (0) 21 938 3500
Fax: +27 (0) 21 938 3520
The Industrial Development Corporation of SA Ltd 19 Fredman Drive
(IDC) www.idc.co.za Sandton
PO Box 784055
2146 Sandton Tel: +27 (0) 11 269 3000
Telefax: +27 (0) 11 269 3116
South African Diamond and 5th Floor, Office 501
Precious Metals Regulator www.sadpmr.co.za S A Diamond Centre
PO Box 16001 Corner Main and Phillip Str
2028 Doornfontein Johannesburg
Tel: +27 (0) 11 223 7043 / 7000
Telefax: +27 (0) 11 334 8898 / 8980
267
National Nuclear Regulator Eco Glades Office Park,
PO Box 7106 www.nnr.co.za Eco Glades 2Block G
0046 Centurion Witch Hazel Avenue
Highveld Ext 75
Eco Park
Centurion
Tel: +27 (0) 12 674 7100
Telefax: +27 (0) 12 663 5513
State Diamond Trader Suite 510, 5th Floor
PO Box 61212 www.statediamondtrader.gov.za SA Diamond Centre
Marshalltown 225 Main Street
2107 Johannesburg
Tel: +27 (0) 11 334 2691
Telefax: +27 (0) 11 334 1540
OTHER MINERAL-RELATED ORGANISATIONS
Aggregate and Sand Producers Association of Unit 8
South Africa (ASPASA) www.aspasa.co.za Coram Office Park
PO Box 1983 Ferrero Road
2107 Ruimsig Randpark Ridge
Tel: +27 (0) 11 791 3327
Telefax: +27 (0) 86 647 7967
Chamber of Mines of South Africa 5 Hollard Street
PO Box 61809 www.bullion.org.za Marshalltown
2107 Marshalltown Johannesburg
Tel: +27 (0) 11 498 7100
Telefax: +27 (0) 11 498 1884
268
Copper Development Association (Pty) Ltd 53 Rendell Road
PO Box 14785 www.copper.co.za Wadeville
1422 Wadeville Germiston
Tel: +27 (0) 11 824 3712
Telefax: +27 (0) 11 824 3120
Federation of SA Gem & Mineralogical Societies 584 Dune Street
PO Box 17273 www.fosagams.co.za Elarduspark
0027 Groenkloof 0181 Pretoria
Tel: +27 (0) 86 677 4001
Ferro Alloy Producers Association (FAPA) Metal Industries House
PO Box 1338 www.seissa.co.za 42 Anderson Street
2000 Johannesburg Johannesburg
Tel: +27 (0) 11 298 9400
Telefax: +27 (0) 11 298 9500
South African Mining Development Association The Riviera
(SAMDA) Ground Floor Block 3
PO Box 2057 www.samda.co.za 606 Oxford Road corner North Ave
2121 Parklands Riviera, Parktown
Tel: +27 (0) 11 486 0510
Telefax: +27 (0) 11 486 1394
Steel and Engineering Industries Metal Industries House
Federation of SA (Seifsa) 42 Anderson Street
PO Box 1338 www.seifsa.co.za Johannesburg
2000 Johannesburg
Tel: +27 (0) 11 298 9400
Telefax: +27 (0) 11 838 1522
269
The Institute of Mine Surveyors of SA Chamber of Mines Building, Room 509
PO Box 62339 www.ims.org.za 5 Hollard Street
2107 Marshalltown Marshalltown
Tel: +27 (0) 11 498 7682
Telefax: +27 (0) 11 498 7681
The South African Institute of Mining and Metallurgy Chamber of Mines Building, 5th Floor
PO Box 61127 www.saimm.co.za 5 Hollard Street
2107 Marshalltown Marshalltown
Tel: +27 (0) 11 834 1273
Telefax: +27 (0) 11 838 5923 / 833 8156
270
DIRECTORATE: MINERAL ECONOMICS
RECENT PUBLICATIONS
(Updated 2015-02-02)
REVIEWS
South Africa‟s Mineral Industry, 2012/2013 (General overview of the SA minerals industry)
South Africa – Invest in an Intense and Diverse Mineral Industry (2012)
INFORMATION CIRCULAR
MB Bulletin (Published three times per annum)
STATISTICS
Mineral Production and Sales, and Mining Labour Statistics (Monthly, Quarterly and Annually by e-
mail subscription)
BULLETINS
B1/2014: Minerals – South Africa: Statistical Tables 1992-2013
REPORTS
R39/2010: Investment in South Africa‟s Mineral Sector, 2010
R40/2006: Possible Financial Sources for Small to Junior Empowerment Mining Companies
R42/2005: An Overview of South Africa‟s Primary Industrial Mineral Imports and Exports,
2005
R43/2003: A Review of the Dolomite and Limestone Industry in South Africa
R44/2004: The Silica Industry in the Republic of South Africa
R45/2008: An Overview of the South African Iron, Manganese and Steel Industry during the
period 1986-2006
271
R46/2005: Bentonite, Pyrophyllite and Talc in South Africa
R47/2005: The Kaolin Industry in South Africa, 2005
R48/2005: South African Ferrous Minerals Production Trends, 1994-2003
R49/2005: Dolomite and Limestone in South Africa: Supply and Demand, 2005
R50/2006: South Africa„s Mineral Production and Sales, 1985 - 2004
R51/2012: An overview of Current Platinum-group Metal Exploration Projects and New Mine
Developments in South Africa
R52/2006: South African Ferroalloy Production Trends, 1995 - 2004
R53/2006: Review of the Dimension Stone Industry
R54/2006: An Analysis of the Impact of a Third Player on South Africa‟s Manganese
Industry, 2006
R55/2008: An Overview of South Africa's Vanadium Industry during the period 1997 - 2006
R56/2007: Provision of Export Facilities for BEE‟s at the Richards Bay Coal Terminal
R57/2007: Uranium: Future Sources (South Africa)
R58/2008: Overview of the Sand and Aggregate Industry in South Africa
R59/2011: Mining‟s Contribution to the National Economy, 2000 – 2009
R60/2007: The impact of Chrome-Ore Exports on the Local Ferrochrome Industry, 2007
R61/2007: Historical Diamond Production (South Africa)
R62/2007: Structure of the Salt Industry in the Republic of South Africa, 2007
R63/2007: Overview of the South Africa's Zircon Industry and the role of BEE
R64/2007: Mineral Abrasives in South Africa
R65/2007: Nepheline Mineral Production in South Africa
R66/2007: Overview of Value systems of selected Ferrous Mineral Commodities, 2007
R68/2010: An Overview of South African Gold Exploration Projects and New Mine
Developments in South Africa
R69/2008: Overview of the South Africa's Mineral Based Fertilizer Industry
272
R71/2008: An Overview of South Africa's Titanium Mineral Concentrate Industry
R73/2008: An Overview of South Africa's Clay and Brick Industry
R74/2009: Overview of the Nickel Industry in South Africa, 1997-2006
R75/2009: Supply, Demand Dynamics of Base Metals versus Prices, 1997-2006
R76/2009: The future role of the Waterberg Coalfield in the SA Coal Industry
R77/2009: Growth Prospects of SA Coal exports and the effect on black economic
empowerment companies
R78/2009: Developments in the Economic contribution of Hydrocarbons, Natural Gas and
Coal
R80/2009: Special Clays Industry in the Republic of South Africa
R81/2009: Status of the Fluorspar Industry in the RSA, 2009
R82/2009: Gypsum in South Africa
R83/2009: Structure of the Andalusite Industry in South Africa
R84/2010: Value Chain System of the South African Heavy Minerals Industry
R85/2009: The Lime Industry in South Africa
R86/2009: Chromium Industry Developments, 1997 - 2008
R87/2010: The Ceramic Industry in South Africa
R88/2010: Overview of the Cobalt Industry in South Africa, 2000 - 2009
R89/2010: Refractory Clays in South Africa
R90/2011: South Africa's Silicon Industry Developments, 1988 - 2009
R91/2012 The future role of the Catalytic Converters Industry in the Downstream Value
Addition to SA‟s Platinum Group Metals
R92/2012 South Africa‟s Ferroalloys Production Trends, 2001 – 2010
R93/2011 Structure of the Salt Industry in the Republic of South Africa
R94/2012 Review of the South African Sand and Aggregate Industry
R95/2012 Review of the Fluorspar Industry in the Republic of South Africa
273
R96/2012: Overview of the South Africa‟s Phosphate Fertilizer Industry
R97/2012: Developments in South Africa‟s Coal Industry, 2006 - 2010
R99/2013: Fuel Cells and the future role of SA through its Platinum Resources
R101/2013: Review of the Sulphur Industry in the RSA, 2012
R102/2013: South Africa‟s Manganese Industry Developments, 2004 – 2011
R103/2013: The Hydrocarbons Industry in South Africa, 2013
R104/2013: The South African Titanium Industry and Global Market Review
R105/2013: New Technological Applications in Deep-Level Gold Mining
R106/2013: The importance of Fluorspar in developing Fluorochemical Industry in the RSA,
2013
R107/2014: An overview of SA‟s Diamond Industry
R108/2014: SA‟s Iron Ore Industry Development, 2004-2013
R109/2014: The Role of Aggregates and Sands in the Construction Industry
R110/2014: The Nexus between Agriculture and Mining sectors „‟Securing food for South
Africa‟‟ 2011, Part 1
R111/2014: South Africa‟s Coal Industry Overview, 2014
R112/2014: Structural Changes in South Africa‟s PGM Industry
HANDBOOKS
H1/2013: South African Ferroalloy Handbook, 2013
H2/2009: Precious Metals Trade - General Information Handbook, 2009
H3/2011: South African Steel Producers Handbook
DIRECTORIES
D1/2015: Operating Mines and Quarries and Mineral Processing Plants in the Republic of
South Africa, (2015)
274
D2/2013: Operating and Developing Coal Mines in the Republic of South Africa, (2013)
D3/2011: Operating Gold Mines and Recovery Plants in the RSA, (2011)
D4/2011: Salt Producers in the Republic of South Africa, (2011)
D5/2012 South African Mineral Beneficiators, (2012)
D6/2012: Platinum-group Metal Mines in South Africa, (2012)
D7/2012: South African Diamond Handbook and Operating Diamond Mines Directory,
(2012)
D8/2011: Ferrous Mineral Commodities Produced in the Republic of South Africa, (2011)
D9/2012: Producers of Dimension Stone in South Africa, (2012)
D10/2012: Producers of Non-ferrous Metal Commodities in South Africa, (2012)
D11/2014: Producers of Industrial Mineral Commodities in South Africa, (2014)
D12/2010: Operating and Developing Black Empowerment Mining Companies in the Republic
of South Africa, (2010)
D13/2009: African Mining – Mining Companies, Government Departments and Related
Organizations, (2009)
D14/2012: Producers of Sand and Aggregate in the RSA, (2012)
275
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THE BRANCH MINERAL POLICY AND PROMOTION
(Small Scale Mining, Beneficiation Economics, Mineral Economics, Macro Economic Analysis)
DEPT OF MINERAL RESOURCES
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RECORD OF FREE PUBLICATIONS DISTRIBUTED BY MINERAL ECONOMICS
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H1/2013 R42/2005 R61/2007 R85/2009 R107/2014
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H3/2011 R44/2004 R63/2007 R87/2010 R109/2014
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D5/2012 R50/2006 R71/2008 R93/2011
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D7/2012 R51/2013 R74/2009 R95/2012
D8/2013 R52/2006 R75/2009 R96/2012
D9/2012 R53/2006 R76/2009 R97/2012
D10/2014 R54/2006 R77/2009 R99/2013 MPRDA, Charter, Scorecard
D11/2014 R55/2008 R78/2009 R101/2013 Beneficiation strategy
D12/2010
R56/2007 R80/2009 R102/2013
Info on how to start a mine
D13/2009 R57/2007 R81/2009 R103/2013
Signature: __________________________________ Date: ___________________________
NB! SOME OF THESE PUBLICATIONS ARE ALSO AVAILABLE ON THE DMR WEBSITE:
www//dmr.gov.za/publications/
Address: Private Bag X 59
Arcadia
0007
Tel: (012) 444-3531/3046/3750
276
